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May 9, 2017

Americas: Yes, You Do Need a Cancellation Clause

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“If I had a quarter for every time a planner has told me, ‘Oh, we would never cancel a meeting—we don’t need a cancellation clause,’ and then had a cancellation, I’d be rich,” said attorney, speaker, and College of Coastal Georgia professor Tyra Hilliard, Esq., PhD, CMP, in a recent MeetingsNet webinar. It could in fact happen to you—here’s what you need to know about negotiating a cancellation clause that will protect you in the unlikely event of having to turn your meeting into a nonevent.

Liquidated Versus Actual Damages

The first thing you need to know is the difference between actual and liquidated damages, said Hilliard. Liquidated damages are an estimation both parties agree are reasonable at the time of contracting. On the plus side, you know what the costs will be if you end up cancelling. On the negative side, the other party is under no obligation to mitigate (unless you have that obligation written into the contract). 

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