Q: In last week's column, you covered 15 points
that ought to be in a major corporate account's contract from the
agency's point of view. What should our agency expect the
corporation to want the contract to say?
A: From the client corporation's point of view,
a well-drafted contract would include the following:
Your explicit duty to perform all of the services promised in
your proposal.Inclusion of performance standards, such as the number of rings
by which you must answer calls, and the methods of measuring your
adherence to the standards.Your incentives for better performance, and your penalties for
worse performance.The corporation's right to approve personnel assigned to the
account.A statement that says that the reports database belongs to the
corporation and your commitment to turn them over to any successor
travel agency when asked.Your acknowledgment that the corporation is not liable for
unauthorized credit card charges.The corporation's right to use other agencies in emergencies or
in outlying areas.The corporation's option to get its own ARC appointment and CRS
contract if it chooses to do so in the future.Your duty not to disclose any travel data to any third party,
such as competitors of the corporation, as well as your duty to
train your employees about the need for confidentiality.Inclusion of overrides and CRS bonuses in the revenue to be
credited against fees.Your strict deadline for payment of any net rebate.The corporation's right to terminate the agreement without
cause on short notice.Your liability for mistakes that cause the corporation to
suffer major losses arising from missed meetings and the like.Attorney fees to be paid by your agency in case the corporation
must sue for breach.Since almost all of these points are diametrically opposed to
what the agency wants, you need to negotiate effectively and
compromise quickly when necessary to get the contract done.
Agencies must be careful not to implement contracts before they
are signed. If the parties intended not to be bound until they
sign, you are unprotected if you incur expenses and find later that
the corporation has decided not to use your agency.
Mark Pestronk is a Fairfax, Va.-based attorney specializing
in travel law. He answers your questions in the Crossroads' Legal Issues Forum.