A contract can ensure that licensees are not left out of pocket when events are cancelled.
By Amanda Frayne of thePublican.com's team of legal experts from London solicitors Joelson Wilson.
Do you offer private rooms or group bookings in your pub? Have you ever been let down by a smaller number of people turning up than booked or, in the worst case, the booking being cancelled at the last minute? Is there any way to protect your profit and prevent last-minute chaos? The simple answer is "yes": by using a contract.
A contract is created when the terms are agreed by both parties, there is an intention to create a legal relationship and "consideration" is promised or given by one party in the reliance of the other party providing goods or services. "Consideration" is a legal term and in this case could be the cost of room hire.
Unusually, most publicans are happy to take bookings over the phone with little or no correspondence entered into.
This is where the problems occur. If the agreement is made over the telephone the terms of the agreement will only include those things mentioned during the call. In any event, it will be very hard to prove what was said.
You should have a clear procedure in place to ensure that the customer is aware of your terms of booking. Initial details should be taken from the customer who is informed at that time that the booking is not confirmed until you have received from them a signed booking form and that you have acknowledged its receipt. It is vital that a booking is not confirmed in any way prior to the customer seeing and agreeing to your terms of business. In a small business it is important that your standard terms of booking are flexible enough to cover a variety of events from perhaps a 21st birthday party with live DJ to a darts tournament. You may want to include certain provisions, such as a cancellation charge (including loss of profit and costs incurred by yourself) for new customers or those who have let you down in the past.
Drafting a contract is far from straightforward and it is advisable to seek legal assistance to help you create one.
Points you may want to consider are limiting your liability if anything should go wrong and of cancellation charges and deposits. You may want to include your right to eject guests in certain circumstances, confirmation that the cost of any damage caused by guests will be met by the customer, whether or not prices include or exclude VAT and a right of approval for any advertisements that your customer may wish to use for an event such as posters, emails and brochures.
Even if you have a legally binding contract in place there is no guarantee that things won't go wrong or that you won't have any last-minute cancellations, but you would then have a way to recover your cost and limit any liability.