In a perfect world, every client’s project would end on a high note with a satisfied customer and a glowing 5-star review. Of course, business isn’t always that simple. And every event professional encounters situations that leave their clients unsatisfied. Fortunately, there are many ways to prevent disputes from turning into legal issues.
In many cases, tough contracts and a few positive habits can help you avoid nasty legal battles. But to smoothly handle client disputes, you need to have the right foundations in place long before any signs of conflict appear. When thinking about the future of your business, everything starts and ends with a contract.
Detailed contracts are your first line of defense when preventing, preparing for, and handling customer disputes. This prevents misunderstandings, defines how conflicts are handled, and sets the tone for the entire relationship with your client. So if you don’t have an attorney-approved (or better yet, attorney-drafted) contract, consider it first before selling or providing any further services.And if you do If you have a contract, it’s a good idea to review it annually to make sure it covers your bases.
Whether you’re writing your first contract or updating an old one, here are five terms to include as a precaution before a dispute arises.
1. Accurate description of the service
All contracts should include a clear description of the services included and, where appropriate, excluded. For example, if you’re not a planner, you might want to make it clear that you’re not responsible for preparing the daily timeline or overseeing other vendors.
2. Detailed overview of payment terms
Include a payment schedule that shows the total amount due, number of installments, and payment due date. If a deposit is required, be sure to specify that the amount is for the reservation of services and event dates, and compensation for turning down other work. Be sure to factor in other items such as travel fees, design fees, and service fees. Finally, we will discuss the consequences of late payments, such as late payment fees and defaults. When it comes to payment terms, it’s better to over-explain and leave no doubts.
3. Clear policies regarding schedule changes, cancellations, and force majeure
Thanks to the pandemic, most event professionals are familiar with these terms and the dangers of removing such policies from their contracts. If you have not yet addressed these provisions, please consult an attorney as soon as possible to properly protect your interests.
There is no standard way to handle these provisions, so it ultimately comes down to your personal policy and what you think is right for your business. Do you respond more flexibly to unavoidable circumstances (e.g., weather events) than to personal changes (e.g., a couple breaking up)? If so, be sure to clearly explain these situations in your contract. Consider the types of services you offer, the number of events you host, and your pricing to determine the best course of action for your business.
If you change your schedule, be sure to charge for the additional work involved (meetings, emails, negotiations with vendors, etc.). You will also want to be able to claim year-over-year rate increases to ensure that your current rate is paid on the new date. In the case of cancellation, especially if the client chooses to cancel the event, set a clear deadline by which the client must pay the full amount.
If your client expresses concerns about these conditions, encourage them to purchase event insurance to cover weather events, illness, and other circumstances beyond your control. Your business bank account is not their insurance policy.
4. Double-sided default clause
There should be a clearly defined process for terminating the contract if one or more parties become dissatisfied. Notify both the client and service provider and set clear terms on the steps you will take to attempt to resolve the situation.
For example, a customer may default due to late payments, lack of communication, or breach of contract. You should have the right to terminate the contract, keep the money you earned, and possibly recover the remainder of your unpaid fees. On the other hand, if the agreed services are not performed or communication fails, the client should have the right to withdraw.
The aggrieved party, on either side, must be given fair notice of the grievance. He typically has 30 days to resolve most situations, and if left unresolved, the non-defaulting party has the right to terminate the relationship. Make sure the contract clearly states all causes of non-performance by both parties and the process for termination.
5. Explicitly specifying clients
There are a lot of opinions on weddings, and it’s easy to get bogged down as the mediator of family drama. Similarly, company events can lead to internal disagreements. Do you listen to the couple or their parents making their bills? Does the marketing manager or sales executive have the final say? The end client in the contract (i.e. the final decision maker) Being clear will save you a lot of headaches down the road.
Beyond the contract: How to prepare for disputes with clients
Detailed contracts are the first step to protecting your business, but they cannot prevent disputes from occurring. You’ll likely encounter client complaints, legitimate or not, so it’s important to prepare in advance to ensure a smooth process. Follow these precautions so that you have enough to support your claim in the event of a dispute.
- Save and file all email communications. An organized digital paper trail allows you to provide evidence in case of disagreement. Create a folder for each client to store all substantive emails sent and received. If you need to get evidence of communications, it’s as easy as searching the client’s folders.
- Save all versions of important documents. If you make changes to a document (such as an invoice, proposal, contract, budget, mood board, etc.), save a file for each revision so you can compare them. For example, if you submit changes to a catering proposal and receive an updated version, it’s helpful to have the original copy to review the changes.
- Check your contract with your attorney. A solid contract only works if you know what your business is about. Schedule a consultation with an attorney and ask that the call be recorded. Then ask them to explain each clause in the contract in detail and explain how they can defend it against the client. Knowing your rights and responsibilities as outlined in your contract will give you more confidence.
A final note on client disputes: Remember to consider your own health and mental health. In some cases, you Not consistent with “correct” legal judgment. Your contract may give you the right to collect all remaining charges for a cancellation, but if you don’t feel comfortable with that action, it’s okay to follow your heart and do what you think is best.
No business is immune to misunderstandings and conflicts, but with a little forethought, you can respond with calmness and confidence.
Leah Weinberg is the next partner. Odberg Law Office—A New York City-based law firm serving business owners and entrepreneurs.