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.
How to Write a Catering Contract – Sample Template
Table of Content
- 1. Customer details
- 2. Draft a ‘whereas’ statement
- 3. Services to be provided and Staffing
- 4. Additional services
- 5. Deposits and reservations
- 6. Cost breakdown
- 7. Supplies and deliveries
- 8. Cancellation policy
- 9. Liability policy
- 10. Policy on leftovers
- 11. Breach of contract
- 12. Taxes and gratuities
- 13. Terms and Conditions
- 14. Signature
- 1. Breach of contract
- 2. Payments not honored by the client’s bank or Credit Card Company
- 3. Responsibilities for related costs
- 4. Insurance and indemnification
- 5. Limitation of remedies
- 6. Resolution of disputes
- 7. Deposit
- 8. Remaining payment
1. 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;
1. 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.
2. 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.
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.
4. 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.
5. 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.
6. 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.
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.
8. 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.
9. Vat payments: You have to state whether your charges are inclusive or exclusive of vat, and who gets to take responsibility for that.
10. 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.
11. 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.
12. 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.
13. 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.
14. 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.
15. 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.
16. 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.
17. Late Finishes: If the event lingers on till late, and transport cost increase, you have to state who would pay the additional cost.
18. 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.
19. 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.
Frequently Asked Questions
What Is Included In A Catering Contract?
A well-written catering contract includes a clear outline of the obligations, timelines, and payment schedules for both sides entering the agreement. It should include the client’s expectations regarding the food service, delivery dates, and menu; and your expectations related to fees and payments.
What Is A Catering Contract?
A catering contract is an agreement between a customer and a caterer to provide catering services such as to supply food for a specified period or a particular event according to the terms and conditions set out in the agreement.
Who Should Use A Catering Contract?
Any business that is into catering services are supposed to use catering contract. Some specific examples of businesses that might want to use a caterer contract include:
- Full-time catering businesses
- Part-time and seasonal catering businesses
- Employed cooks and chefs who cater alone on as a side-hustle
- Restaurants that offer catering in addition to traditional dining
What Is A Delivery Caterer?
Catered food is generally prepared in one of two ways. One is on-site prep done in a mobile kitchen, and the other is catering delivery – where food has been prepared off-site in a catering kitchen.
Why Is A Catering Contract Important For Caterers?
A catering contract is important for caterers because it will protect you from liability and any unforeseen events that will likely come up while carrying out your business as a caterer. A good catering contract protects both parties in case something goes awry, and it is an indispensable part of doing business as a caterer.
What Is The Average Profit Margin For A Catering Business?
Well, catering businesses range in size and business model, but generally, although CoGS may be the same between catering and FSR, catering can operate with much lower overhead costs. Profit margins average 7 to 8 percent for catering service businesses.
What Situation Requires A Catering Contract?
Any catering services that are contracted to a caterer requires a catering contract especially if it is a corporate organization that is giving out the catering contract.
What Do Catering Services Offer?
Catering is the business of providing food service at a remote site or a site such as a hotel, hospital, pub, aircraft, cruise ship, park, filming site or studio, entertainment site, or event venue.
What Is The Use Of Catering Agreement?
A Catering Agreement is a specific type of Service Agreement whereby one entity, the caterer, contracts to perform catering services at a specified event or events for the other entity, the client. In these agreements, the caterer can be either a business or natural person, and so can the client.
What Information Should A Catering Agreement Cover?
A good catering agreement will cover the duties, timelines, and payment schedules for the caterer and the client. The catering agreement should indicate the type of food service the client wants, the menu, and delivery dates as well as when you expect to receive a payment and the due date.
What Should Be In A Catering Contract?
In addition to the menu- and service-related items, the catering contract should include standard contract terms and conditions, including:
- Basic contract information
- Final date for any changes
- Health and safety requirements
- Cancellation policy
- Breach of contract
What Are The Disadvantages Of Contract Catering?
Well, the probable disadvantages of contracted catering services are: that handing over the operation to a contractor means losing day-to-day control over service levels and standards.
How Do You Get Hotel Contracts For Catering?
In order to get hotel contracts for catering, you just have to approach the hotel with a collection of your works, that is your catalog. You can also leverage on your network and referrals from people who are connected to the hotel.
How Does Contract Catering Work?
Catering contracts are legal agreements entered into between the client and caterer to supply food and refreshments in the workplace, for a specified period. Contracts should be fair to both parties and be able to give accountability and value to the client as well as a realistic reward and/or incentive to the caterer.
How Do You Get Clients For Your Catering Business?
You can get clients for your catering business from any of the following;
- Reach Out to New Venues
- Set up Google Alerts
- Contact Real Estate Developers
- Use Social Media to Listen
- Filter Your eRFPs
- Don’t Underestimate Word of Mouth.
- Email Your Past Clients and Prospects
How Do Businesses and Organizations Choose A Contract Caterer?
When it comes to choosing a contract caterer to cater for an organization, the organization usually call for caterers to submit proposals or tender bid, the caterers that submitted their proposals are screened, the successful ones are invited to defend their proposals and the best of the all is chosen and awarded the catering contract.
What Do Contract Caterers Do?
A contract caterer is a company that provides catering services to a business or organization (its client) for a specific length of time. In some cases, services are paid for by the client, such as an education authority or a company, for the benefit of their students or employees.
What Is the Advantage Of A Contract Caterer?
The major advantage of a contract caterer is accountability. Contract caterers hold the risk and responsibility for achieving success. Inspiration and ideas will be driven by them and tailored to client needs. The caterer is accountable for all catering costs and reports at the detail level that suits the client.
What Does A Catering Company Provide?
Catering companies provide food and beverages for a wide variety of events. Their services help delight guests and often set the tone for the experience. Some catering companies offer customized menus while others create packages.
How Much Does Corporate Catering Cost?
You can expect corporate catering to cost somewhere between $5 and $90 per head. This will all depend on what type of catering style you’re after, as well as staff hiring, timing, and size.
How Do You Get Catering Contracts In Bangalore?
To get catering contracts in Bangalore might be tough, join a catering association or a home cooked food delivery network like Oota Box. As being a member of a network gives you instant visibility & credibility. You may also get advice from experienced and prestigious companies in the market.
What Is Corporate Catering?
A professional corporate catering service can help a business in executing a stress-free event. The entrepreneur or the organizers are given space to concentrate on the business at hand.
What Questions Do Clients Ask When Hiring A Caterer?
- What kind of foods are your specialties?
- What would you recommend?
- How do you present the food?
- What is the estimated cost?
- How will you handle last-minute or dietary requests?
- Do you provide a sampling of the menu?
- Will The Food Be Prepared Onsite Or Brought To The Event And Reheated?
- Can You Provide Additional Equipment Such As Tables And Chairs?
- Will you supply waiters and waitresses?
- Are there any extra charges?
What Are The Types Of Catering?
Here are the six different types of catering:
- Corporate Catering
- Wedding Catering
- Social Event Catering
- Concession Catering
- Food Truck Catering
- Restaurant Catering
What Is The Biggest Catering Company In The World?
FTSE 100-constituent Compass Group. As the world’s largest contract catering company, FTSE 100-constituent Compass Group operates in 45 countries and employs close to 600,000 people, with North America as its largest market. It services a wide number of sectors, from business to defense, and includes the U.K.’s National Health Service among its clients.
Does A Caterer Always Need To Write A Contract For Catering Services?
Well, it depends on the caterer and of course the clients they are catering for. But over and beyond, it is very important for a caterer to always write a contract for any catering services they are involved in. It will surely protect their business from liabilities in case any goes wrong.
What License Is Required For A Catering Service?
You will need a business license or business permit in most places, which gives you the right to conduct business in your area. A local government agency usually handles permit applications and issues these documents.
What Is A Standard Catering Deposit?
The standard catering deposit amount is 50 percent of the total catering bill. This percentage is factored in after all costs — including sales tax — have been calculated.
How Do You Pay For Wedding Catering?
The average cost per person for a wedding in the United States is $40 for a plated meal and $27 for a buffet. Adding an open bar typically ups the cost by $15 per person. You should tip a caterer between 15 percent and 20 percent of the final cost.
How Do You Write A Catering Quote?
You should take note of the following points if you are preparing a catering quotation:
- The date of order.
- Food items required for catering service(s)
- The quantity of food required.
- Name of the event and the date of the event.
- Price for each item(s) and subtotal price.
How Do You Calculate Food Per Person When Catering For An Event?
While there is no perfect formula to calculate how much party food and drink you will need, there are some basic guidelines that usually ensure a successful party. The easiest rule is the “One Pound Rule.” Provide one pound of food for each adult guest (not including drinks or dessert).
Can A Catering Contract Be Evaluated By An Attorney Before I Sign?
Depending on who is contacted, some lawyers will not even accept requests to review contracts that they didn’t draft. An easier approach worth consideration is to request help from the On Call network. When you become a Premium member, you have the ability to ask for a document review from an attorney with experience in business or ask additional questions related to your catering contract.
Why Are Contracts Important In Business?
Contracts are important in business because contracts provide a written document that outlines the full understanding of the business relationship and scope of the work so that no one can claim any misunderstandings later down the road. They specify exactly what rights are being purchased and what rights you’re retaining. They’re binding and legally enforceable.
What Do You Do If Your Customers Don’t Pay Your Invoices?
Here are some of the things you can do if your customers don’t pay your invoices;
- Discuss all costs and payment terms before you begin a project
- Bill for work upfront
- Send invoices right away
- Be persistent with late customers
- Charge late fees
- Set up a payment plan
- Hire an attorney
- Take clients to small claims court
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