Q: Our agency has been fortunate enough to win some large corporate accounts in the last year. Right after we win, each account has asked us to review its standard form of procurement contract. Several of these contracts are remarkably similar: They are all called "Master Products and Service Agreement" or the like; they are all about 15,000 words (about 30 pages single-spaced) or longer; they all contemplate later "Statements of Work" (SOW) to be signed each time a new division comes into the travel program; and they all have lots of clauses that I find inappropriate, objectionable or irrelevant. Are these monster contracts some sort of fad? How should we approach the account about all the contract changes we need without alienating the account or dragging things out?
A: Having an omnibus form of contract that covers procurement of all goods and services is indeed a trend in the corporate world.
Every one of these contracts contains standard clauses that would never appear in a corporate travel management contract drafted for that purpose alone. For example, there might be irrelevant clauses that deal only with purchase of tangible products, such as inspection of goods, rejection and conformance to environmentally responsible manufacturing.
There will also be clauses allowing the account to pay 30, 60 or 90 days after delivery, and even reject certain services and not pay for them. There might be clauses making you responsible for the acts or omissions of down-line suppliers, which would mean airlines, hotels and car rental companies.
Finally, there will undoubtedly be clauses imposing unreasonable burdens, such as the need to obtain $10 million in automobile insurance, submit audited financials or give the account title to all intellectual property used in performing the contract.
Your first tactic should be suggesting that the parties use your standard corporate-account contract instead. The advantage to you is savings in time and money, and the advantage to the account is avoidance of all the inapplicable terms in its contract that can cause confusion.
Even if the account adds a dozen or more sections to your contract, you are still better off than if you have to tackle its 30-page monster. However, the chances are that the account will insist on the latter.
You probably need a lawyer to assist with the changes to the account's standard form and to contribute additional, useful suggestions. Most lawyers do not understand the particular risks of the corporate travel business, such as protecting against credit card chargebacks and hidden-city ticketing by travelers trying to beat the system, so you might need to educate your lawyer.
Other key changes might involve a commitment to use your agency exclusively and to refrain from bypassing your agency by booking on supplier websites. If the account vetoes exclusivity, try fallback wording such as appointing your agency as the "preferred" travel management company.
Concentrate on the relatively small number of changes that are really important to make, as the account will probably not accept the multitude of other changes that every lawyer would like to make on your behalf. The more changes you ask for, the longer it will take for the account's legal department to review them.
Mark Pestronk is a Washington-based lawyer specializing in travel law. To submit a question for Legal Briefs, email him at [email protected].