Unexpected tariffs on food, equipment, and essential materials can send event costs soaring, forcing planners and vendors to scramble for solutions. Without contract safeguards, these sudden price hikes can derail budgets.
“It’s a challenge to address tariffs in meeting and event contracts. Typically, we don’t know far in advance if tariffs will be levied on products and how much those tariffs might be. But it’s an issue that affects venues and suppliers as much as the organization hosting the meeting,” said Joshua Grimes, an attorney at Grimes Law Offices.
They can significantly inflate the cost of imported goods. “Contracts typically assume fixed costs for non-food supplies, so without addressing tariff-caused price increases, the supplier would be left absorbing the tariff’s costs,” said Grimes.
Food prices pose an even bigger challenge. Venues typically set rates just before an event. When tariff-driven costs stack on top of standard market fluctuations, final bills can skyrocket.
Contract Strategies to Manage Tariff Risks
Planners can incorporate proactive measures into their contracts
Substitutions for Comparable Items: One practical approach is allowing the affected party to substitute a comparable lower-cost item for any product subjected to a tariff. “If the price of a non-food product increases substantially as a result of a tariff (for example, 10% or more), the vendor supplying that product would have the right to substitute another comparable lower-cost item, subject to the group’s consent.
Flexible F&B Options: For F&B, if a tariff causes a significant price increase after contracting, the food provider or the meeting group should have the option to substitute a lower-priced menu item, again subject to the group’s approval.
Force Majeure for International Meetings: A unique challenge arises when a U.S.-based group meets abroad and faces tariffs on U.S.-made products. “In that case, if it either dramatically increases the cost of importing products from the U.S. to the meeting or bars an essential product from being brought to the meeting location altogether, it would be a force majeure occurrence. The remedy for this force majeure would either be canceling the meeting entirely, changing elements of the meeting as appropriate to proceed without the products subject to the tariffs, or moving forward with a smaller meeting and waiving potential attrition damages at the group’s discretion,” said Grimes.
