Mark Pestronk
Q: My agency has landed a new group client: a large family reunion that meets once a year in a different city, and the family members fly from different parts of the country. There could be as many as 70 group members each year. One of the group members has drafted a simple contract between our agency and the "Smith Family Reunion Group." Would such a contract be enforceable? If not, how can I get a contractual commitment for all the work I am going to do?
A: The contract would probably not be enforceable. Contracts must be between "legal persons," and a group is not a legal person.
A legal person means an individual, a partnership, a corporation or a limited liability company. A mere group is not one of these, unless it has been incorporated as a nonprofit corporation or the like under the laws of your state.
You can check whether there is a corporation by the name of "Smith Family Reunion Group" or something similar by searching the name at the website of the state government agency that handles corporations in your state. The secretary of state is usually that state agency, and you can find a link to each state's corporation-search Web page at www.secstates.com.
Some states also allow an association to become a legal person by filing papers as an "unincorporated association," and you can probably search such entities on the Web pages noted above. However, the chances are high that the Smith Family Reunion Group has never made such a filing.
So the document is probably legally worthless and serves only as a guideline covering what is expected of you.
The contract might be enforceable against the group's signer individually, but if you tried to hold him responsible for everyone's payment, he would argue that he did not intend to be personally bound. He would probably prevail if the document did not expressly state that he would pay for everybody.
However, there are three ways in which you could have enforceable contracts for this group. First, you could get a signed participant's agreement with each family member 18 and over, and you could include not only the payment obligations but also your disclaimers of liability for acts or omissions of suppliers and events beyond your control.
Second, you could have a contract with just one group organizer who agreed to collect from the rest of the group and to be personally responsible for paying you if they did not pay.
Third, you could combine the first two methods and have a contract with both the organizer and the group members. The former would make the organizer responsible for collections and communications with the group.
I recommend the third method: Whenever you have a group movement, get a contract with the leader and a separate one with each participant. My advice covers all kinds of groups, including destination weddings, which seem to generate a lot of misunderstandings, especially when the prospective bride and groom break up before the wedding.
On the other hand, my advice does not necessarily apply if the group is part of an established business, such as a company that contracts with you for incentive travel. In those cases, you only need a contract with the corporation itself.
Mark Pestronk is a Washington-based lawyer specializing in travel law. To submit a question for Legal Briefs, email him at [email protected].