MEMORANDUM
To: Ms. C Date: February 10, 2020
From: Your name, In-House Meeting Planner
Subject: Review of The Westin Agreement
This memo addresses whether, and under what context the agreement made to The Westin Hotel (Houston) can hold The Grind liable for damages and penalties to Westin Hotel or the agreement can be forfeited or be used by The Grind Inc. for a scheduled conference at The Westin, Memorial City (Houston) from 5th to 7th June 2020. The question remains important for two reasons. First to assess the consequences that The Grind Inc. may incur for contract avoidance. Second to evaluate the validity of the consequences and the rationality with regards to risk management, for the benefit of The Grind Inc. in respect to the conference slated for the mentioned date.
A valid enforceable contract was reached as at the date of signing, which was July 3rd, 2019. The contract requires that The Grind for the use of The Weston Hotel Memorial city facilities, be able to deliver 147 guest from the period of 4th night to 6th June 2020, nights. On the period of June 4th five guest rooms will be available, but this number significantly increases on 5th and 6th to accommodate 70 people in the guest rooms and 1 in the hospitality suite respectively in the days that follow.
As per the agreement made, the facilities The Grind will be using, include guest rooms, meeting rooms, the ballroom, and the lobby. Additionally, as the in-house meeting planner, I notified Steve Sales, of our intention to use the Fitness Center facilities to which he alluded in good faith that they will be open. As of now, one aspect that misses include the fitness center which is under renovation.
They had promised by word of mouth that it would be available but due to the current 6-month-long renovation within the facility, this area was to be included within the package. Within the contract there is a clause that states “Hotel will promptly notify Customer of any construction or remodeling to be performed in Hotel over the Event Dates other than routine maintenance and Hotel will use all commercially reasonable efforts to ensure that any such occurrence will not materially interfere with Customer’s use of Hotel.”
As the agreement was signed in haste on the eve of July 4th, and the matter of the Fitness center was not a required stipulation within the contract, The Westin Hotel, cannot be held liable for not disclosing to The Grind as the matter was not stipulated within the contract. As such, it was not within their contractual obligation to notify The Grind on the impending construction within an area 4 floors above the focal point of the meeting.
This does not materially interfere with the business of The Grind other than offer a minor inconvenience to the primary goals in which the conference, the guest room, meeting rooms, ball room and the lobby already perform. As such, the hotel cannot be held liable for failing to make it available, as it was not stipulated within the contractual terms of agreement. All the stipulated facilities are available for the conference guests.
The Westin hotel has provided The Grind with a cut-off date that expires on May 4th and has been in effect since July 3rd 5PM CST. Under this stipulation, cancellation as of today will see The Grind lose 60% of the fee, that are regarded as liquidated damages towards Mitigating the proposed lost revenue that the Hotel will have inquired on the date of the conference.
If the cancellation was effected now The Grind stands to lose – 60% of $23,170 which is $13,902 and additional taxes which is 17% of the said value totaling $2363.34 in total paying The Weston $16,265.34.
The dead-line cut off date will see The Grind lose 80% of the total proposed revenue that would have been earned by The Westin Hotel from the conference. This does not include the 17% state and local taxes that will also be incurred. This totals about $ 3,151.12
This would total $21,687.12
As of now, there was little marketing for the conference before the end of the year, and only 20 people of the envision 147 have signed up for the event. If the current number persists and no more than 80% equal to a total of 118 people sign up, which implies to 80% less actual usage in the hotel guest room night commitment, as per the contract, The Grind will have to pay the difference between the 80%-night room commitment and customer actual usage multiplied by average room rates with an additional taxes.
118-20 = 98 Room Night commitments
98*110= $10,780 plus taxes which is equal to 17% of taxes (1832.6) = $12,612.6. If the meeting is to go on with the current signed number of people who have signed up to attend standing at 20, The Grind will have to add $12, 612.6 in room night commitment, but a lower beverage assumed beverage and food cost of $2500 on the initial 7000 dollars. This will categorically see the grind paying in addition to the 20 attendees accommodation and food $12,612.6.
This totals to
20people @110 per room
In addition to
$12,612.6
In addition to $2,500
=$17,312.6 plus 17% in taxes which equals $20,255.74
Based on the above conclusion, it is my advice to the president of The Grind Inc. Ms Capulus, to issue a cancellation order before the March 1st to June 5th 2020 period. In this period the cancellation fee increases substantially, as such, the company will be forced to conduct a costly aggressive campaign to increase the attendance numbers before the cut-off date for reservation which is May 4th 2020 from which no further reservations can be done.
In conclusion, there is no substantial misconduct that can hold The Weston Hotel liable for breach of contract. There is one minor misuse of goodwill in which Steve Sales, the Director of Sales and Marketing at the Westin, alluded to the fact that the Fitness center will be open for business during the contracted period of the conference, to which he failed to notify The Grind, of the already proposed refurbishment over the course of six months including the periods in which the facility will be in use by The Grind. I would recommend for the cancellation before 1st March 2020 to save on costs.

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