Legal Question in Business Law in California

This is a great question

What can happen to a restaurant when they lets say have an maximum occupancy from the city of 381 people, and they sell you a 400 person agreement. And you have given a 1000.00 Deposit.. Further more no such contract states anything about a cancelation. Nor was it ever talked about. I obviously had no choice but to cancel the event. They keep calling and bothering me saying that according to California Law, supposatly I am reguired to pay a 40% of what the total was going to be. These guys are rediculas...What can they get charged with if I ever took them to court, for false claims thru out the whole deal...Thank you


Asked on 6/27/07, 3:47 am

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: This is a great question

I'd want to compare the agreement with the realities of the facility before advising you. Perhaps the 381 person limit applies only to a main facility or a particular room, and they have other space in another room, patio, annex or whatever. Maybe the restaurant was relying upon the reality that when you invite 400 people to a shindig, probably fewer than 380 will pctually show up. Maybe the restaurant can get a waiver for one-time events.

The success of a suit for "false claims" would depend upon proof of facts and proof of damages. If you can't prove actual monetary harm, I doubt you'd be awarded anything.

As to the 40% forfeiture, it seems steep, but read your contract. If the restaurant can convince the small-claims judge that (a) you signed a contract giving them 40% of the deposit as liquidated damages and (b) it was a reasonable estimate of their actual damages for a cancellation at the time the contract was signed, they would win.

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Answered on 6/27/07, 1:12 pm


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