Open Air Business June/July 2018

TICKET HOLDERS
Most festivals rely on advance ticket sales
to finance expenses incurred before the
event takes place, including (but by no
means limited to) the cost of advertising
and promoting the event, and paying
deposits to suppliers and performers.
Tickets are sometimes sold direct by
the promoters but more often than not,
a third party agency is employed to sell
tickets. The rights of the ticket buyer
depends in part on who they bought
the ticket from and how they paid for it.
Some promoters try and write in the small
print that there will be no refunds in the
event of cancellation, but in legal terms
it is difficult to write such a condition in
a manner that can be relied upon – not
least because the buyer will usually be
a consumer and protected from “unfair
contract terms”. Those who paid by credit
card or through PayPal have a right to
claim their money back from the credit
card company, but inevitably those
companies have the right to make their
own claim against the promoter/organiser
of the event.
No matter how they paid for their
tickets, the hapless would be event-goer
will find it well-nigh impossible to obtain
compensation for things like train or coach
tickets bought in advance.
One increasingly common “solution” is
for the promoter to make arrangements to
re-schedule their own event or to make an
arrangement with another event organiser
who agrees to accept and honour (without
further payment) tickets sold for the
cancelled event at a different (but similar)
event. Why do this? In short, it increases
footfall at an event that might otherwise
be undersubscribed and allows the second
promoter to profit from spend during the
event by those additional attendees.
PERFORMERS
It may seem obvious that, if a cancellation
is caused by the absence of a performer, he
or she is not entitled to be paid and should
be liable for any consequential losses
arising as a result. That however may not
be the case as it all depends on the terms
of the contract between the promoter and
the performer. The protection afforded to
consumers against unfair contract terms
will not apply and most “star acts” will
have employed a small army of agents
and lawyers to ensure that their liability
in the event of a cancellation is strictly
limited. The message is to carefully
consider and negotiate contract terms
so that all concerned are clear about the
consequences of cancellation.
SUPPLIERS
Most suppliers will have their own standard
forms of contract. Again, as the customer
will be the event promoter, it is important
to consider the small print and, despite the
“take it or leave it” attitude of many, the
rule is that nothing is non-negotiable and
the message again is to carefully consider
contract terms.
LANDOWNERS
It is common to find that agreements
between organisers and landowners,
particularly in the early years of an event,
are based on little more than a handshake.
Sooner or later, one or other party realises
that it might be an idea to have something
in writing but it is not uncommon to find
such agreements written “on the back of
a fag packet”. The absence of a properly
thought out written agreement will
inevitably cause disputes in the event of
cancellation, particularly if that arises from
an “Act of God” such as adverse weather
conditions. However, the starting point
would usually be that the landowner
is entitled to his/her/its “rent” (licence
fee) unless the reason for cancellation is
clearly a consequence of the fault of the
landowner, unless the contrary is clearly
spelt out in a written agreement.
CONCESSION/STALL HOLDERS
The position here is very much under the
control of the promoter/organiser as it
is he/she or it that determines the terms
upon which concessions are granted,
but yet again it is frequently the case
that either no written agreement exists
or that the agreement simply deals with
the question of fees, profit sharing and
dates of payment – cancellation clauses
are frequently overlooked. In the absence
of anything specific to the contrary, a
concession/stall holder would be entitled
to repayment of any deposit or fee paid
as well as any losses or expenses incurred
directly as a result of cancellation.
However, it is extremely difficult for a
concession holder to claim a loss of profit
(although a claim for loss of opportunity to
make a profit might succeed, resulting in a
relatively small award of damages).
If an event is cancelled mid-way
through, the position becomes far
more complicated and that underlines
the desirability of a properly drafted
agreement.
PROMOTERS AND INVESTORS
Ultimately, this is where the buck will
almost inevitably stop, particularly
with regard to refunding advance ticket
sales. It is often the case that advertising
and promotional material (including in
particular websites) do not make it clear
who the promoter actually is. I frequently
find myself asking the question “who/
what exactly is my client here?” and those
dealing with event organisers might easily
find themselves in the same situation,
knowing full well that they have a claim but
in considerable doubt about who the claim
should be made against.
Hiding the true identity of the organiser
might be a ploy to avoid claims but it is
illegal and ultimately the individuals who
have been dealing with suppliers etc. may
well find themselves on the receiving end of
claims, even if the true position is that they
are not actually responsible.
It is far better to be completely upfront
about the contracting parties. Organisers
and promoters can provide themselves
with a considerable degree of protection
by forming either a limited company or
limited liability partnership (LLP) to be the
contracting party with all concerned. Some
suppliers (and lenders) will require personal
guarantees from directors, particularly if the
LLP or company is a new one with no track
record of successful trading, but at least
if everything does go disastrously wrong,
the liabilities and losses of the individuals
concerned will be restricted to their
investment in the business and the extent of
any such guarantees.
A final note or warning – in certain
circumstances, directors can be held
personally (and criminally) liable for,
among other things, fraud and obtaining by
deception. Selling tickets for an event that
does not at that time have the necessary
consents and licences, without making it
clear in promotional material that that is
the case, is an extremely risky thing to do.
NOEA
To learn more about the National
Outdoor Events Association (NOEA),
search for a quality event supplier, or
join its membership, please visit noea.
org.uk or contact Susan Tanner - 01749
674 531 / susan@NOEA.org.uk
For more information on the NOEA
Annual Convention on 22 November,
visit noea.org.uk/annual-convention
58 WWW.OPENAIRBUSINESS.COM