Legal Question in Business Law in New York

Cancellation Policy

A customer requested a rate for limousine service using an online directory that we subscribe to. Upon receipt of the rate (for wedding services), the customer visited out website and booked a limousine (this requires a credit card for billing). Our website has a link, on the reservation page, prior to entering information to reserve car service. It states ''click here to view our policies''. The cancellation policy reads ''All reservations cancelled will be charged the minimum rate plus 20% gratuity for 6 hours''. Once he booked the limo, he received both a confirmation and a contract for the service via email. The contract stated that he had already been charged a 30% nonrefundable deposit. Two weeks later he cancelled via email without submitting the contract to us. I advised him that he would not receive the non-refundable deposit back, and that our policy states that we infact normally would charge for 6 hours of service for cancelling, however we would hold him liable for only the non-refundable deposit. I would like to know if we can hold him liable, even though our ''website reservation form'' does not have a question ''do you agree to our policies'' and that he had not signed the contract?


Asked on 11/05/04, 6:12 am

3 Answers from Attorneys
Norman Nadel Norman Nadel, Esq.

Re: Cancellation Policy

I think that you have a strong case.

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Answered on 11/05/04, 8:34 am
Stephen Loeb Law Office of Stephen R. Loeb

Re: Cancellation Policy

If you had charged him the 6 hours, I believe that portion of your "contract" would not be enforceable, however deposits are used specifically for the reason that you should not lose money due to someone else's failure to follow through. You will likely be able to defend your nonrefundable deposit policy if it becomes an issue.

Should you like to discuss this or any other legal matter, you can call my office to schedule an appointment for a consultation or in the alternative, I can be reached for on-phone low-cost legal consultation at 1-800-275-5336 x0233699.

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Answered on 11/05/04, 8:57 am
Peter Papagianakis Business Law Firm LLC

Re: Cancellation Policy

Dear Sir or Madam:

Not all contracts have to be in writing and/or signed. Generally, in the eyes of the law, the issue is whether the parties came to a meeting of the minds. To determine whether there was a meeting of the minds, it would have been more helpful if you provided a few more details regarding the procedure for reserving the car service. However, based on your description of the events and modern course of conduct for business via the Internet, your policy regarding the non-refundable security deposit seems reasonable and it seems like the other party accepted the terms of your policy.

Keep in mind, however, that this sort of situation is likely to arise again in the future. Thus, you should think about the prospective business aspects of your predicament. Accordingly, I suggest that you review your website�s limo request procedure and improve it by (i) adding a simple contract that incorporates all your policies and (ii) requiring the end-user to accept your policies by clicking an �I accept� button on your website. After the end-user accepts your policies, then you should proceed with accepting the credit card.

If you are interested in discussing this matter, please call me for a free consultation. I have additional legal suggestions that might improve your business procedure and mitigate the potential losses from cancellations. My practice focuses exclusively on business transactions and provides legal strategies and solutions to protect and grow businesses.

Peter Papagianakis

(917) 478-0570

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Answered on 11/05/04, 9:39 am


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