Rules of the Road for Caterers: Tips for Effective Contracting

Catering is a tough business. With the pressures associated with finding reliable labor, keeping up with soaring food costs, and fighting for business in a saturated marketplace, it’s difficult to turn a profit. Another potential roadblock to profit are flaky, difficult, or indecisive clients who cancel events unexpectedly, short change their caterers on the bill, or alter (and continue to alter) established plans for food and beverage service on a whim. This article’s purpose is to help caterers protect themselves from such circumstances. This protection comes in the form of a written contract.

The key to contracting is to define the respective parties’ expectations. By outlining both the caterer’s and the client’s responsibilities, the parties eliminate ambiguity. Eliminating ambiguity avoids disputes. Doing away with disputes keeps the parties out of court. And that is a good thing.

The devil in a catering contract – like any other service contract – is in the details. Such a contract should be drawn up and signed when the client agrees to hire the caterer. In their contracts, caterers should demand specificity about from their clients about what is expected. Caterers should also be clear about the costs for services rendered – no one likes to be surprised by a bill with charges, which were unexpected. Additionally, caterers need to be clear about their expectations regarding cancelations and refunds.

A catering contract should include these details – at the very least:

· Date, time, location of the event;
· The start time and ending time of the event;
· The number of guests expected at the event;
· If there is food-service, how the food will be served: buffet; tray-passed; service at the table; or otherwise;
· The method by which prices will be calculated: by the guest; the plate; or otherwise;
· The amount charged per unit for this food service;
· The number of courses to be served – including the cocktail hour;
· The menu for each course, which details key ingredients and acceptable substitutions for menu items;
· Whether there will be special menu accommodation for vegetarians or children;
· With market priced items, like lobster or other fish, the maximum amount the client will pay for these items;
· The types of beverages to be served with the food service (e.g., coffee, iced tea, colas);
· An understanding as to what will become of leftover food;
· The total estimated cost for food service, excluding labor;
· The number of staff to be provided by the caterer, their individual job descriptions, and the costs related to labor;
· If there is alcohol-service, whether the alcohol will be provided by the caterer or the client;
· If the alcohol is provided by the caterer, the cost per bottle or drink;
· The ratio of bartenders per guest;
· The types of alcohol that will be served;
· The time period in which alcohol will be served;
· Mixers and non-alcoholic beverages to be served at the bar;
· Corkage fees for each bottle opened, if applicable;
· Whether there is a “buyback policy,” wherein the caterer will “buy back” unopened bottles – if so, what price will the caterer pay for the unopened bottles;
· The total estimated cost for alcohol service, excluding labor;
· Whether the caterer or the client will be furnishing tables, chairs, linens, dinner and glass ware, silverware, and serving pieces;
· The costs related to rentals furnished by the caterer;
· An understanding who is responsible for delivery, set up, clean up, break down, and return of equipment, including rental items;
· The costs related to the caterer’s delivery, set up, clean up, break down, and return of equipment, including rental items;
· The name of the person overseeing the staff, along with contact information;
· The manner in which staff will dress;
· The cost per hour for each staff member, along with a total estimated charge for labor;
· An agreement concerning payment for labor if the event goes into “overtime”; and
· Whether there exists a location fee for the venue and who is responsible for payment of this fee to the location.

Putting the above provisions in an agreement gives the client a clear understanding about what he or she is getting from the caterer and how much it is going to cost. This clarity will go a long ways to avoid the potential for misunderstandings down the road.

Some other tips for effective contracting – – –

It is naive to believe that clients will not seek to make changes to menus or other details relating to the catering service. A good caterer should be accommodating to change in the interest of client satisfaction. However, there should be limits to a caterer’s accommodation. Caterers should therefore create a cut-off date for changes. At a certain point, the caterer has to make arrangements with its vendors in preparation for the event. The failure to create a deadline for changes invites havoc for the caterer in the days leading up to the event. Caterers should also have a deadline for the client to advise it of the exact number of guests expected at the event.

catering contract cancellation policy

The caterer’s contract should include a clear refund and cancelation policy. Regarding refunds, there may be a sliding scale for the amount to be refunded as it relates to when the event is cancelled. A client’s cancellation six months ahead of the event should likely warrant a 100% refund. To the contrary, a cancellation a day before the event will give the caterer a basis to award no refund. As well, caterers should include language, which is advantageous to it in the event of their non-performance. Caterers can’t always control the circumstances. Weather, Acts of God, and other situations that make service by the caterer impossible or impracticable should be included as reasons to excuse a caterer’s failure to perform.

The contract should be specific concerning payment for services rendered. This specificity should include a deposit at the time of contract, as well as an agreement by the client to promptly pay for services upon completion of the event or shortly thereafter.

In the unhappy event of litigation, a caterer would be wise to include provisions in its agreement to designate the jurisdiction and venue in which a dispute is to be resolved. Litigating claims in a hometown is a cheaper venture. Additionally, the caterer should reserve the right to recover reasonable attorney’s fees and costs in the event it is compelled to litigate over the contract. In many states, the award of attorneys fees are not a matter of automatic right to a prevailing party in a lawsuit – reserving that right in a contract prior to suit will allow a court to make this award to the prevailing caterer.

It is also wise to include a provision requiring the client to defend and indemnify the caterer for any claims for damage to property or other people arising from the acts of the client or the client’s guests. As well, with regard to alcohol service, the client and caterer should arrive at a clear understanding that no minor will be served alcohol and that the caterer reserves the right to take the steps necessary to ensure that no underage guests are served.

As a final note, a caterer shouldn’t go it alone when it comes to formulating client contracts. It should contact a trusted attorney when drafting a template contract. He or she can advise the caterer on specific points needed to be covered in the contract so at to comply with applicable laws. A caterer wants to be sure it has an agreement, which can be enforced by a court in the event of dispute with a client.