Are you about prospecting for a catering job? If YES, here is a complete guide on how to write a catering contract plus terms and conditions you must include.
What is a Catering Contract?
A catering contract is known as a legal and binding written agreement outlining service expectations between a food vendor and a client in respect to an event. A well-written catering contract gives a clear outline of the obligations, timelines, and payment schedules for both sides involved in the agreement.
A good contract protects both parties in case something goes awry in the business as it oftentimes do, and caterers or clients that are not protected in this situation by an iron-clad contract may be at the losing end.
Components of a Catering Service Contract Agreement
- Type of event
- Date of the event
- Service description
- Number of guests to be catered for
- Conditions to be met before changing number of guests expected.
- Menu selection and price
- Cancellation policy
- Subcontracting services and prices
- Refund policy
- Seating arrangement
- Total cost of the job
- Payment schedule
- Non-refund policy; if any
- Signature of both parties
A viable catering contract usually includes; the menu to be served at the event, food service, delivery dates, liability concerns, procedures, fees and payments. While outlining this, you should also look into the terms and conditions of the business, and who would bear the responsibility for each fallout.
Drafting a catering contract and getting your client to sign it is very important and it could be the only thing that can maintain the peace in that relationship and as well keep the client from going overboard with his or her requests, and making a lot of last minute changes at your expense. Know that you cannot have too much information in this kind of contract, in fact, the more information you have, the better, as it would mean that you covered the entire basis.
If you are a caterer that has just signed up a client and is wondering how to draft a good catering contract, below are procedures that can help you draft your own contract, plus the terms and conditions you need to include.
Writing a Catering Contract – Terms & Conditions You Must Include
- Customer details
Before you enter into a contract with a client, you have to know the client very well. To do this, you have to gather important details about the client that you need to execute and write the catering contract.
You would need to draft a form that requests the following information from the client; the client’s name, address, telephone number and email address, the function’s date and specific location, the function’s start time and expected duration, and the number of guests expected – adults, children, and vendors like photographers and DJs. Insert this information into the first few paragraphs of the contract, and then keep the form for future reference.
2. Draft a ‘whereas’ statement
Draft a “whereas” statement containing the names and addresses of the parties and the general subject of the contract. Whereas statements are not required in all jurisdictions, but they are useful for providing a general understanding of the subject matter of the contract.
A whereas statement explains what goods and services are being exchanged and what each party is expected to provide. A whereas statement for a catering contract might read, “Whereas the client desires to hire the caterer for the purpose of providing services and the caterer wishes to provide services in exchange for the agreed sum, the parties agree as follows.”
3. Services to be provided and Staffing
It is important for the client to understand how many servers he or she is getting for his or her negotiated price and the type of service he or she is ordering so that there is no confusion at the event. List the type of service you agreed with the client, such as a buffet, tray-passed appetizers or a sit down event. List on the contract how many servers, bus people and bartenders will be present from your company and list any charges for additional service members.
4. Additional services
Draft provisions related to any additional services you would have to provide in relation to the event. For example, if the caterer is providing decorations or furniture for the event, these services should be mentioned in the contract, and the fees outlined too.
5. Deposits and reservations
Include in clear language about the amount of deposit required and date for reservation. The client must understand that by reserving a certain date, you are now unable to book that date for anyone else should they cancel. The date reservation deposit is usually 50 percent of the total bill. State when the final payment is due. Many catering businesses expect payment in full a few days ahead of the scheduled event if costs exceed a certain dollar amount.
6. Cost breakdown
Since money is invariably the bone of contention in contractual disagreements, your contract should be as detailed as possible regarding finances and services rendered. Include a detailed cost breakdown of food and other services that you will be providing.
This should include the number of staff members per guest; the menu and type of service – either butler-style or buffet style. Some people mix it up with buffet style for the hors d’oeuvres and then a sit-down dinner with waiter service, or visa-versa. Know your style and then detail the hourly rate per staff; the type of beverages to be served (also important is if there will be a bar), and any overtime charges.
List the charge for additional guests (and be sure to mention when a final number must be submitted), and discuss the charge for extras that might be added, that are not included in the base price. The contract should clearly state your policy regarding the forms of payment that you accept, such as cash, checks, credit card, etc.
7. Supplies and deliveries
The contract should also state whether it will be the caterer or the client who will supply tables, chairs, linens, dinnerware, glassware, and silverware. If it is the caterer, list the costs related to these rentals. Make it clear as to who is responsible for deliveries, set-up, clean-up, and return of equipment.
Although the name of the person who will be overseeing the staff may not be known at the time the contract is signed, a clause should be included stipulating that you will provide the information as soon as you know it, along with contact information. Also, discuss and include any proper dress code requirements for your staff members.
8. Cancellation policy
Event details may change unexpectedly, and you should negotiate terms for refunds or cancellation of the catering agreement. Including a clause outlining the severance of the agreement protects the catering owner and the client from ongoing liability and fees. Determine the terms concerning the refunding of the deposit or the assessment of additional charges to sever the catering contract.
The policy can give a flexible refund, depending on how far in advance the cancellation is made. If a client cancels three months in advance of the original reserved date, you have a good chance of rebooking that date, so a larger refund can be given than if the client cancels only two weeks before the reserved date.
9. Liability policy
Create a clear liability policy. You should not be held responsible for any damage to rented equipment or property as well as any loss caused by guests at the event. Consult a lawyer to make sure this language is very clear in the contract. Also make clear what you will be liable for, such as damage caused by your own employees.
10. Policy on leftovers
Write down your policy for leftovers when the event is over. In some states, health regulations prevent the caterer from giving the leftovers to the client, so this must be stated clearly, otherwise there could be a dispute over who owns the leftovers. If you are able and willing to leave the leftovers with the client, negotiate this with them at the contract signing.
11. Breach of contract
Write down the exact procedures for any breach of contract as well as what constitutes a breach of contract and make sure all parties understand who is responsible for legal fees or other procedures should they become necessary.
12. Taxes and gratuities
Draft a statement about how gratuity and taxes will be handled. Some caterers may opt to cover these fees in their overall pricing, but if you will be charging these fees in addition to the price of catering, they should be explained in the contract.
13. Terms and Conditions
The final section of a catering contract should list the terms and conditions of the relationship between you — the caterer — and the client. List information regarding your liability insurance, the final date the client can make changes to his guest count or menu, and payment information.
Break down payment information by the amount of a deposit due, the amount of the deposit that is refundable and when the final payment on the balance is due by the client. Outline your cancellation policy and whether a client receives a refund for canceling by a certain date.
Leave space at the bottom of the contract for your signature and that of your client(s) as well as the date. Always include a paragraph before signing that states your guarantee for quality service as well as a direct number to reach you if any issues arise or changes are needed.
Terms and Conditions You Should Include in a Catering Contract
Terms and conditions contain the fine details of a contract being entered into between a caterer and his or her client. The contract itself will state the basic obligations of each party and aim to clarify what would happen if things go wrong. Terms and conditions are mostly non-negotiable and they are invaluable in avoiding misunderstandings and disagreements. Some of the terms and conditions usually provided for in a catering contract are as follows;
- Breach of contract: Outline the required steps for a breach of contract. Before signing the agreement, ensure that both parties are aware of who is responsible for attorney fees in the event of a lawsuit. Also, include an option to seek mediation for conflict resolution if you wish to avoid costly legal fees.
- Payments not honored by the client’s bank or Credit Card Company: If your client’s check is returned unpaid for any reason, your bank is going to charge you a fee. Your terms and conditions should include a charge for payments not honored by the client’s bank or Credit Card Company.
- Responsibilities for related costs: You should state here who is responsible for all costs and/or deposits relating to use of the venue, and for obtaining any necessary permissions, authorizations, or other requirements for the caterer to provide services at the venue.
- Insurance and indemnification: You as the caterer may have to obtain general liability insurance relating to your services at an event. But for your own safety and the safety of your equipment, you should state here who would be liable for damages done by event guests.
- Limitation of remedies: If a caterer cannot fulfill its obligations under a stated contract for reasons outside of its control, the caterer may locate and retain a replacement catering company at no additional cost to client, or refund client’s money in full. Caterer will not be responsible for any additional damages or compensation under these circumstances.
- Resolution of disputes: In order to protect your business from negative publicity, you can prevent the client from posting any negative information about any issues arising out of the contract or event on any online forum or website without providing advance written notice of the intended content thereof, and providing the other party with an opportunity to resolve any issues between the parties amicably.
- Deposit: You should outline the minimum deposit required from a client before work can commence. It is sometimes a confirmation that the deal has been sealed. Caterers demand between 50 and 75 percent deposit. The deposit is usually calculated on the total estimated price of the event; and the deposit must be deposited in the company’s bank before the event.
- Remaining payment: This part states when the remaining payments would be made. It typically states the exact number of days. If the payment has not been received by the due date, the caterer can attach an interest rate to the funds. The more the funds are being held, the more the interest rises, just like in a loan.
- Vat payments: You have to state whether your charges are inclusive or exclusive of vat, and who gets to take responsibility for that.
- Mode of payment: You have to outline the modes of payment that is acceptable by your business, and if any other mode of payment can be considered in an emergency, and if this emergency payment attracts a fee.
- Changes to venue: If there was a venue change mid-way, would it attract a fee and how much do you intend to charge as fee.
- Cancellation: Sometimes, events do get cancelled due to unforeseen circumstances. If there has been an event cancellation, would it attract a fee, and how much is your client looking at? Usually cancellations attract fees according to the date of the cancellation. Some caterers charge 50 percent of the estimated bill if the event was cancelled within fourteen days of the event, and 100% with seven days. If you have engaged sub-contractors for the event, your client would also bear the cost. This should be explicitly stated.
- Damages: Usually damages occur in an event, so you have to state in clear terms who would bear the cost of the damages or loss both on your side and that of sub-contractors.
- Substitutions: Sometimes during meal preparation, you may not have all the ingredients you want due to one circumstance or the other. You should state that you reserve the right to substitute an unavailable ingredient.
- Price amendment: The prices quoted may sometimes not be at par with what is needed to carry out the catering job to the satisfaction of your client. You have to state that you have the right to amend prices if there has been a price fluctuation.
- Wines: Wines are usually subject to market availability and this should be stated clearly. Vintages and prices can be altered. Corkage fees will apply to the Customer should they wish to provide their own beverages.
- Late Finishes: If the event lingers on till late, and transport cost increase, you have to state who would pay the additional cost.
- Allergic Reactions: You have to make provisions for allergies. You have to explicitly state that you cannot guarantee that any produce on your menu is totally free from nuts, nut derivatives or other ingredients to which guests may have a serious allergic reaction since you cannot operate in a nut free environment. You should advise their guest to talk directly with you the caterer so you can arrange a suitable alternative. With these terms in place, your company can never be held liable if someone has a allergic reaction to your food.
- Claims and legal action: You should also state under which condition a claim should be filed and around what time frame the filing should be. This is very important so as to prevent clients from putting in claims whenever they wake up and feel like putting in claims. You should include the fees and who would bear the brunt of the fees incurred in the filing, and under what conditions the fees would be born.
The key to contracting is to define the expectations of all the parties involved. By clearly outlining the caterer’s and the client’s responsibilities, a good contract eliminates ambiguity, which in turns helps to avoid disputes. Catered events can be stressful for everyone, but if you start off with a good contract, customized to yours and your client’s needs, you will be on the right track to success.
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