What is an Event Rental Contract?
Whether you are helping to plan the anniversary party for someone celebrating 75 years or whether you are planning your own birthday bash turning sweet 16, rental contracts are something that should be on the list of things to talk about. An event rental agreement just makes sense. It is just as important of a document for an event planner as the cake contract or the employment of a DJ.
In its most simple form, an event rental agreement is just that—a document that lays out the terms of a rental of space . There can be a wide variety of items included in an event rental agreement, such as:
An event rental agreement can serve as a guide for the planner or the individual who is on site at the event to make sure that everything is completed before the guests arrive. Simple timing issues can be covered so that there is no confusion as to when something is going to be delivered or picked up.
In addition, it makes sure that everyone is on the same page regarding the costs. There may be a reduction in costs if certain items are returned the next day instead of the next week, etc. These types of agreements serve as the vehicle to clearly discuss these important types of issues.
Key Elements of Your Event Rental Contract
An event rental agreement should contain a number of key terms to make it clear that the properties and equipment are being rented, not sold.
Rental Terms
This section should include the date(s) when the property will be rented, whether the rental period extends through the entire event or ends at a particular time on a specified date, and whether the rental period may be extended without prior approval.
Payment Terms
This section should address the rental payments, including the amount due, the time periods due, any deposits required, whether interest will accrue, and remedies for nonpayment, including not delivering the item or reposing the item (generally only permitted when the risk of loss is shifted to the renter).
Cancellation Policy
This section should address whether the agreement can be cancelled or whether it is non-cancellable. If the agreement is non-cancellable, be clear that the agreed upon payment or fee is due regardless of the use and delivery of the rental property and equipment. This section should also address whether the cancellation can be done for convenience, in which case no payment or fee may be due.
Sponsor Liability Clauses
These clauses should be used to protect the sponsor from property damage claims that a third party may make against the sponsor. For example, if there is damage to a client’s property from a rented sofa, chair, or a power failure from a rented genie suspension, the sponsor should not be responsible for the repair of that property. There should also be a liability clause protecting against personal injury claims brought by a third party against the sponsor or against the sponsor with the exhibitor named as a co-defendant or cross-defendant.
How to Write an Effective Event Rental Contract
Draft Details:
- Define the services to be provided in a clear and specific manner. Written-out descriptions or bulleted lists of individual services are acceptable.
- Avoid vague terms, like "reasonable efforts" and "good faith."
- Conduct a pre-event site visit so you know what is available on site and what needs to be rented.
- Allow adequate time for finalizing your Agreement.
- Ask local venues for copies of their client-friendly contract terms as a guide.
- If you’re renting space, be sure to obtain the necessary permits for your event and require the venue to provide you copies them.
Additional Resources:
- Legal Templates – Event rental companies that are members of the American Rental Association (ARA) have access to legal resources and contract templates on the ARA website.
- Legal Forms – Members of the Wedding and Rental Association of America (WRAA) also have access to forms and templates on their dedicated website.
- Online Forms – Rocket Lawyer offers templates for event rental agreements, but be aware of the restrictions; legal advice will be limited because of the program’s "one-size-fits-all" approach to legal issues.
Common Terms and Clauses for Your Event Rental Contract
In any event rental agreement, there will be a set of mutually agreed upon terms that spell out the understanding of both the renter and the company providing services. Here are some of the more common provisions you will run into and what they mean:
Force Majeure. This is a fancy French way to say "we’re sorry, but we just can’t deliver under these extraordinary circumstances." Some companies will have a force majeure provision that relieves them of liability when there is an outside event that renders them unable to perform their obligations under the agreement. Merely requesting the change of an event date is usually insufficient to trigger this provision; moon phases, presidential elections, and periods of Mercury in retrograde are usually not enough.
Negotiated Deposits. I’ve worked with very few event rental companies that are willing to book an event without a nonrefundable deposit – the amount is usually half the estimated cost of the rental. You can expect that the event rental company will keep the deposit in the event of cancellation, but a larger refund may be available if the demand for your date permits the company to find work for your equipment through the cancellation, or if you have a mutually agreeable economic loss (i.e., two weekends from now you have to make eye contact with your new boyfriend’s parents and can’t do both in the same weekend).
Damage Deposit. If you are renting a home, park district land, or another venue that has a space you want to hold for your event, you may have to sign an additional agreement. This should have a damage deposit provision that allows your host to collect a deposit for damage and loss to the venue.
Indented Permits. If pesticides are used on the venue grounds, the licensee may be required to provide proof that they have complied with pesticide application laws, including obtaining any necessary permits.
Food and Beverage Protection. Most agreements that concern events where guests will be receiving food and beverages will indicate that the caterer is responsible for any and all liquor licenses, permits, and bond documents required under the law.
Renter’s Obligations. The renter may be obligated to submit a number of obligations to the rental company, including:
Indemnification – the renter agrees to indemnify the rental company against any action arising from the use of services
Release – the renter releases the rental company from any liability in the event the agreement is not fulfilled
Attorney’s fees – the renter agrees to reimburse the rental company for any attorney’s fees that arise as a result of the renter’s breach of the agreement
Top Pitfalls to Avoid in Event Rental Contracts
With the plethora of rules and requirements a venue is required to consider, in addition to the safety and expertise of the rental company itself, getting a rental company to handle the specifics of an event could be highly beneficial to the venue. The rental contract, however, could put the event rental company (and by extension, the venue) at risk if not prepared properly. The most common mistake to avoid with event rental contracts is relying on pre-printed forms.
Pre-printed forms may be standard language, but unlike an experienced rental company, the pre-printed contract will not have the same level of expertise. Because these forms are designed for one type of rental situation, they lack the ability to think forward and predict what issues may arise during an event or afterwards. For instance, a standard form may state that party A is responsible for any losses or damages to the property. However, it does not prepare for the situations where cost may vary or the damage in question did not occur to the property of either party, but rather to that of a third party who was injured at the event .
As these contracts also lack the effort of a more experienced rental company, they also lack the attention to detail necessary to anticipate every situation. As a result, the rental company may be caught off guard when an issue arises. While standard forms might have generic clauses such as indemnification, indemnity or hold harmless, they are often poorly written, unclear, or completely absent. Without the use of indemnity clauses, the event rental company could risk injuring itself, as well as increasing the risk of claims made against it and the venue.
An event planner could also end up assuming liability through the actions of its employees. If the event rental company happens to be understaffed, the event planner could be left with the responsibility of having to hire additional help and managing its workers. In addition to possible wage obligations, having to manage a temporary workforce could leave the event planner vulnerable to claims based on a variation of employment law theories.
Frequently Asked Questions on an Event Rental Contract
The following are a few common questions regarding event rental agreements:
Q: Are event rental agreements legally required?
A: No, it is not legally required that you enter into an event rental agreement with anyone. However, it is a best practice and generally recommended because oral rental agreements can be unreliable and difficult to prove. Putting things in writing also shows your professionalism as a rental company or event planner. If you enter into an event rental agreement for any item, be sure to also enter into an event rental agreement if you are hiring a service, such as a photographer or a videographer. Additional event rental agreements should be entered into with each service provider on the day of an event to avoid any misunderstandings that arise from oral agreements.
Q: Can I modify an event rental agreement once it has been signed?
A: Yes, if both parties agree to the modifications, the event rental agreement can be modified. Quiggle Law attorneys frequently draft addendums modifying event rental agreements because oftentimes changes must be made as the date of the event approaches to reflect how the party will actually deliver products and services. Litigation can be avoided by modifying the event rental agreement to reflect the outcome of negotiations.
Q: What happens when there is a dispute over an event rental agreement?
A: An attorney may need to become involved in the situation to assist in negotiations or to potentially file a lawsuit. Quiggle Law attorneys are experienced in litigating event rental agreements and other contracts. We also represent businesses and individuals negotiating other issues in the events industry.
Conclusion: How to Guarantee a Successful Event Through Your Contracts
All of these points are extremely important to ensure that the rental equipment is prepared and that any problems are addressed before your guests arrive . It also helps you provide your guests with the very best service and ensures that you will receive referrals and repeat business for future events.