Contract Debacle

[djhath]

Here's a sticky one.

I had "booked" a bride a couple months ago for October 22, 2005.

I sent out a contract and explained that my retainer ($200) was due with the signed contract. After a couple weeks went by, I inquired further to see if the bride had received the contract, which she did. But, she lost it. I explained that it was important to get the retainer and contract into me to seal the date.

I sent out another contract, and then shortly thereafter, the FOB mailed a check to me for the retainer, but I still had no contract. I called the bride again and asked if she had it and she did. Still a couple few more weeks go by and I inquire again, and she e-mailed back today saying they decided to cancel the wedding.

This made my heart sink south, because it puts me in a situation, which I've read of many other DJs who have brought their unique situation to the table and hoped I'd never have to deal with something like this.

I'm 95% sure that I turned away other business for this date. I will be able to confirm that when I get home tonight. Assuming this is the case, here are the two things that I now have to consider...

1. Though the bride didn't explicitly state it, I can imagine that the FOB will be in touch to ask for the money back.

2. My contract says that events cancelled within 90 days are subject to 50% of the remaining balance.

The question is, does the retainer indicate some sort of "binding contract" that showed inclination of booking me, whereby - a) I'd have good footing to hold on to the retainer, [img]style_emoticons/<#EMO_DIR#>/cool.gif[/img] my payment terms would somehow be legally bound where I could demand 50% of the remaining balance per proof that I turned away business for this date.

Good thing I've got some lawyer blood in the family. I will be consulting them, but am curious about how others interpret it as well.

[Jim Casey]

Hi John...
You do technically have a verbal contract and acceptance of the terms.

That said...if FOB calls for a refund, explain that you actually are due 50% of the remaining balance and termination of your services must be done in writing.

After this, your policy needs to change by adding a "sunset clause". The contract becomes void after a certain date and you move on.

Do NOT ever pencil in a dtae for anyone. First come, first served. A basic of business that NEVER grows old.

[djdonny]

My non-legal interpretation would be that the check for the retainer is yours to keep, since it can legally be interpreted as an intent by the client to retain you for that date. However, since you never received a signed contract, you have no agreement from the client stating that they owe you 50% of the balance if cancelled within 90 days.

If I were you, from now on I wouldn't cash the retainer check OR hold the date until both the check and signed contract are received. Leave the date available until that time. If someone else calls you for that date, call the client and tell them that if the contract is not received within 24 hours you'll need to offer the date to the second caller.

That being said, it's still two months away from a Saturday date in October. I'm guessing that you should still be able to book that date. Keep the $200 retainer, don't follow up on the 50% balance, and seek to re-book that date. I you're really worried about re-booking that date, offer a $200 "cancelled date" discount to potential clients, and you'll still end up earning the same amount overall.

[davergr]

Sorry Donnie, I have to disagree. that $200.00 check could be repayment of a loan or some other reason, not necessarily a retainer. Because there is no signed contract, the check is for no specific purpose. It's the contract that specifies the terms of both the retainer and the balance.

For a contract to be held as legal it must have 3 things: 1. a date, 2. signatures of both parties involved, and 3. consideration. If you don't have all 3 there is no binding contract.

It is my opinion that the money should be returned if requested.

In the future, DJHATH should consider doing what I do. When someone says they want to book us, I send the contract with the stipulation that they have 7 days from reciept to return it with the retainer or the date becomes available to anyone else. If the client calls within the 7 days and asks for an extension I would give them another 7 days. If the contract is not back by then the date is open.

Jim, in reference to your point about a "verbal" contract, I don't think that would stand up in court in this instance. It would come down to "he said-she said" and they could change what they originally said and he would lose. Courts always seem to go with the party who is the most wronged in the Judges opinion.

One point I do agree with wholeheartedly is that everything MUST be in writing including the cancelation. By documenting everything, you protect yourself and stand a better chance legally.

[Jim Casey]

Hey Dave...
The dad would never have sent the $200 retainer fee in the first place if HE didn't believe his daughter was going to retain his services.

I believe that WOULD pass muster in court (just my opinion)

[davergr]

I agree that the Fathers intentions were good. He sent the retainer in good faith probably believing a contract was signed by the B&G. However, most Judges do not rule on good faith agreements when it comes to a service provider. It's not a case of "willing buyer-willing seller here. It's more a question of terms of a contract. With this issue, the Father was not a party to the discussion or agreement. He was just doing a favor in paying the retainer, a third party.

In this case there was no contract, so any payment for services not rendered would have to be returned.

Of course, every Judge can rule the way he feels based on State laws and case laws. But usually they rule for the "injured" party.

The simple way to get the true facts would be for DJHATH to contact an attorney for his opinion(one who is not in the family).

I think, if for no other reason than good business, he is obligated to return the money.

[Cap]

You're toast. What slays any idea of a verbal contract is the intent to enter into a written one. That's just the tip of the iceberg.

Sorry folks, but must of the advice so far is emotional with little basis in law. That being said, there's no telling how a judge might react.

As mentioned elsewhere, not having a termination date on the contract was your own self-inflicted wound.

[Wolfie]

Cheers, John.

I'm no attorney but I would like to offer my thoughts.

Our service agreement states that a signed copy of the agreement must be returned and accompanied by the retainer payment within ten (10) business days of receipt. This is done for clients who book without meeting with a representative of our company.

Upon receipt of the signed contract and the retainer payment we will contact the client to inform him/her that the engagement is booked. This is typically done via company letterhead accompanying the client's copy of the agreement.

My humble advice: Do not accept a retainer payment (deposit the check) without the accompanying copy of your service agreement that has been signed by the client.

Also, a word to the wise: You are running a business. Specify that checks be made payable to your company name. This requires a business checking account. People will usually think twice before bouncing a check on a business.

It works for us. I hope it helps.

[HeadlineDJ]

Not sure about US and state laws, but could you not include T&C's along with your contracts, and within the T&C's mention that in the evnt of a payment being received with NO contract then they have only 7 days to request a refund for cancellation after which they lose the right for a refund with or without a signed contract???

So basically, by them sending you payment they are agreeing to the terms and conditions you sent them. Make sure the Cheque/payment details are ON the T&C paper so it's their fault if they claim not to have fully read it.

Just an idea.

[John Daniels]

Judges usually rule in favor of the teary-eyed bride!

They don't like us mean old DJ's who prey on poor unsuspecting newlyweds!

You don't want to go there . . . take my word for it!

Since you really don't have any written agreement I believe that you should return the retainer!

Receiving the contract back without the retainer is not a binding agreement, just as receiving the check (retainer) without the contract is not a binding agreement.