Legal Question in Business Law in California

Hi,

I own and operate a small catering company in the S.F. Bay Area. I have been in business over 20 years and for the first time I had a client cancel an event 24 hrs. before the scheduled time. The bride was ill and hospitalized and unable to attend. At first the event was considered completely canceled and then the bride and grooms family's requested that the food be prepared and they would pick it up from our central kitchen. This service was provided and took the time and effort of our chef(me) and 2 of our staff. I consider this to be fulfillment of our contract with the client. The client is requesting a 25% refund of slightly over $2000.00. I would be happy to provide you with the complete contents of our Terms & Conditions if needed. The paragraph that the client is citing follows: Fire, Flood, Earthquake, Weather Damage, Power Failure, or any other �Act of God� � or terrorism that prevents SYR or the CLIENT from carrying out their contracted agreement, I.e. the event cannot take place as agreed upon, shall be handled as follows; the CLIENT is responsible for 75% of the contracted price if the event is canceled completely, If a new location is specified, a delivery charge may be added depending on the new distance In any case, the CLIENT has the right to the food within all safety parameters. Any expense to SYR caused by late notification will be borne by the CLIENT.

If the CLIENT fails to arrive at the event because of an accident or other actions beyond their control, the cancellation will be handled as written in the above cancellation policy.

I feel that in essence the event was not canceled. All food and supplies were purchased and ready for final preparation. Servers were scheduled and payed. Location fees were payed. If

If no additional action by my company was requested I feel the client would have the right to the raw food and a refund.

Thanks for your help.


Asked on 11/09/10, 11:34 am

2 Answers from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

It sounds to me as though the client's request for a different performance by you, and your agreement to do that, and both parties' performances, amounts to a "novation" (substitution of a new contract for a prior agreement) and if the new agreement did not specify a price adjustment and none was implied, the original pricing and terms remain in effect. If I were the small-claims judge hearing the case, I'd say there has been no cancellation and the refund, if any, needs to be in proportion to the cost savings, if any, you achieved by not having to fulfill the full terms of the original agreement.

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Answered on 11/14/10, 1:02 pm

I disagree with Mr. Whipple. The provision your client quotes says they are entitled to the food. That would be the food provided for in the contract, not the ingredients. In addition, at best the contract is ambiguous, and by law ambiguities in a contract are resolved against the party who prepared the agreement. If it is not your intention that the client can request to pick up the finished prepared food in a situation like this, and receive a 25% refund, you should spend a few hundred dollars and have a good attorney re-write your agreement.

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Answered on 11/15/10, 2:57 pm


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