Legal way to dissolve a contract?

Can anyone answer the question of how to legally dissolve a contract if both parties want out of it? I have an event booked for several months now and the person who contacted and dealt with me for the past few months is a friend of my client handling everything for her. We are two weeks away from the event and I get a call this afternoon from the actual client and not the friend (who has been great to work with) and they are very upset about certain aspects of the services we are providing and "Do not like the tone of the language of our ABC service" and they are being very SH%$&Y about it and when we got off the phone this evening they said they will call be tomorrow and discuss the event they and had a meeting this evening and could not talk and did not know if we will be able to do business together. The disruption comes from the fact that if we are providing abc service at a event there can be no other alcohol at the event that we are not supplying, handling and serving. If we see a guest with a bottle we will ask them to put it away and if they don't or it continues to happen we will shut our bar service down. They say they will have friend who will want to bring bottles of liquor and carry around themselves and it is their event and they should be able to do what they want. I explained that yes it is your event and you can do what you wish however it is my abc license and my insurance and it can't happen or we will not serve. I then offered to allow them out of the abc portion of the contract and we would handle the food and they can get their own abc one day permit and purchase their own alcohol and do what ever they wish and when we got off the phone that is where we were at. I have the feeling it will stir back up when they call me tomorrow and if the phrase "I don't know if we will be able to do business" comes up from them again I plan on telling them it's just fine with me and I'd be happy to refund their deposit and void the contract for the event all together. Which brings me to my question, how do you legally do this? I am thinking that maybe I send them a form and have them sign that they requests to void the catering agreement in return for a refund of the deposit. Would this be legally binding or is there a better way to do it?

keeperofsecrets said:

I'm not an attorney (sing along with me "but I play one on TV"). I happen to do contract reviews as a part of my role in corporate life. That said:
You need a contract every time. Every time. For your protection and the other party's. That contract needs what is called an "exit clause". The exit clause should be mutual. Either party can terminate the contract at any time and for any reason but you will need to specify the penalties for termination and be prepared for some penalties for you as well. I'd suggest that the penalty is a percentage of the expected revenue, say 30%. As the vendor, you can say a discount if they book you again. You might even want to eliminate the penalty altogether if the other party finds an alternate engagement for you. The point is that you can write into the contract whatever you want and you can use plain English. Just get their signature with date. If you can, have it notarized.

None of this helps you now, but future engagements would be in a better place.

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I believe that I have what you are saying should the client not follow through with a payment or backs out. In this case though if needed I am willing to dissolve the agreement plus refund their deposit and I just want to cover my rear that say if we agree to cancel the contract tomorrow and then a week from now I book another event for the date that there is no way this client can have a change of heart and hold me to this contract. See below, that is what my catering agreement states.

. If Client fails to pay any payments when due prior to the date of the Event, this Agreement May be cancelled or rejected by the Caterer. Client agrees that Caterer shall not thereafter be obligated to provide any service hereunder. In such case, or if Client shall, for any reason whatsoever, cancel this agreement, Client acknowledges that it would be impossible to fix the actual damages resulting from such cancellation, and Client therefore agrees that Caterer may retain (a) 100% of the Deposit (if this Agreement was delivered more than ten (10) days prior to the Event) or (b) 50% of the Adjusted Invoice Amount (if this Agreement was delivered to Caterer ten (10) days or fewer days prior to the Event), in each case as liquidated damages and not as penalty, which represents a reasonable estimate of fair compensation to Caterer for damages incurred by Caterer resulting from such failure to pay, or cancellation, by Client.

Grabnabber said:

HBMTN-

I'm not a lawyer but I deal with this type of thing occasionally.

I'd speak with your client one last time and reiterate your concern about your insurance not covering guests your company did not serve. This is your livelihood and you have a right to be concerned.

If after speaking with the client you find that they want to cancel what I would do is get a signed letter from the client stating in no uncertain terms that they would like to terminate the contract. Then I would respond with a very polite letter of acceptance of their request to terminate the contract. Include a copy of their letter with your response. Send it UPS/Fedex/Reg. Mail so you can get a tracking number and a signature of receipt.

You could enforce the contract as per your 10 day stipulations that you posted. Or..... not- since there is a friend involved and there could be bad blood if you take a hardline stance on the issue.

If issues arise in the future and you need a lawyer after the fact you will have good documentation of the transaction to provide your attorney.

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Thanks. So as of now they did not call me today and just emailed and said they are undecided on what they want to do. I am planning on waiting until I hear from them and then play it by how they respond. If I don't hear from them or have this settled by Saturday I am refunding their deposit and backing out of the contract. The contract states if I don't have the final guest count and remaining balance paid by this Friday I have the right to reject the contract which I plan to do and honestly hope I get to do. There are too many great people out there to work with to have to deal with people like this!!

Grabnabber said:

Sounds like a good plan.
I would recommend sending an email (date & time will be recorded for your records 8)) as well as phoning them immediately after hitting the send button

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I bet there is a cussing on the other end of the phone :shocked: it will be like :blah: I like your thought though, will most likely do that. Thanks

poorolddan said:

Interesting part will be, if the deal is terminated, them finding a replacement caterer on short notice that will put it together for them for a fair price. I've had short notice calls an know they had something go wrong and know I don't want any part of a bad situation.

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I called a friend who owns another catering business (not BBQ) and told them about what is going on and asked them should the client and I not be able to come to terms would they want the job or want me to refer the client to them. They told me to send that client somewhere else. They weren't interested in catering for her. Some people are just meant not to do business together and I'm okay with that. As of this posting I still have yet to hear from the client of what they want to do and everything is due tomorrow with the event 2 weeks away and I don't even know what menu, services she wants if any.

Bill-Chicago said:

I want to know what happened.

Did you cater the event?

If so, was it a cluster f$$k?

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We worked it out in the end. She added a additional 20 guests to the final count and added one hour to the bar service. Once we met in person she was a much better. I think in the end that her friend being the go between caused a lot of the issues and when it was all done I think she'd hire us again and I'd cater for her again.

I was fortunate enough when I was young to work for a man who had been in business for 50 years. He was extremely great at making upset customers happy. I saw him on more than one occasion talk to very angry and upset customers and by the time they left had genuine satisfied smiles on their faces. I asked him one time how he was able to keep his cool and not tell them off. His respond was "Son I have not been in business for 50 years because of the satisfied customers, I've been in business so long because I was able to make the unhappy customers happy" His words rang in my head through all I went through with this client and was the only reason I didn't bail on her and say see ya.