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To sue or not to sue? Client stopped payment on check after cancellation period

post #1 of 8
Thread Starter 

Never had to deal with this before. In mid-December I was hired to cater a corporate holiday party being held in mid-January (200 guests). They requested to pay by check instead of cc. Their accounting department took a while to process the check, so I didn't receive and deposit it until last Friday. My bank just informed me that the client stopped payment. I've emailed and called the client, and the only response I've received is an email that my services have been canceled. Because of the size of this event & menu I turned away other business while I was waiting for their check. Should I take them to small claims court? I've missed out on profits from other events that I could have booked for the same day. ***On their signed contract: "Cancellations after 12/18/15 forfeit any monies paid... Any monies paid is acceptance of the terms of this proposal.". The check they stopped payment on was for $6k.

post #2 of 8

A check is a contract. I think you have grounds to sue as they provided no other form of communication.  Probably just small claims, though the allowed value in small claims varies from jurisdiction to jurisdiction. Small claims, you wouldn't need an attorney. 

 

http://www.nolo.com/legal-encyclopedia/small-claims-suits-how-much-30031.html lists the small claims limit by state though it lacks a date to indicate how current the list is. 

Palace of the Brine -- "I hear the droning in the shrine of the sea monkeys." Saltair
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Palace of the Brine -- "I hear the droning in the shrine of the sea monkeys." Saltair
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post #3 of 8

IDK.

6K is a hefty chunk of change if you win.

I would file if I had a good chance to recoup the entire amt (minus filing fees).

Just curious..... what was on the menu?

 

mimi

 

OBTW.... welcome to Chef Talk.

post #4 of 8

I would file in small claims.  Although, if you watch Judge Judy or People's Court it seems like you cannot collect if no goods or services have been exchanged.  You might be able to make a case for your expenses though.

post #5 of 8

Disclaimer: my only legal education if from watching The People's Court and Law and Order SVU.

 

From what I understand you have to prove that you lost whatever amount you are claiming. Simply saying that "I could have had other jobs" had they given you ample notice doesn't cut it. The law abhors forfeiture (quote from judge Wapner I think)  which means that that clause in your contract requiring 100% payment is against public policy because you did nothing for the customer. I think if you went to court and asked for 10% you would win.

post #6 of 8
I have the same legal training, ha ha ha, and agree. First, though, maybe establishing that there was a valid contract. I think there was an attempt to weasel out of the contract by stopping payment, and the might use that oddly phrased clause to claim no contract because the money didn't change hands.
post #7 of 8

I agree. YOU provided the contract in which you state "Any monies paid is acceptance of the terms of this proposal." So you screwed yourself.  Now it's up to the court to decide whether issuing the check constituted acceptance of the contract.

 

I suggest that from now on you get a signature as acceptance as well as at least a down payment otherwise no contract. I would also suggest that the late cancellation fee not exceed the down payment. 

 

See a real attorney not me.

post #8 of 8

Well you guys are referencing general principles, how are your own contracts worded? 

 

When I catered under the "cafe-guy", we usually faxed the contract out with all the event 

essentials on it, the client signed it and faxed it back. Once the down payment was made,

and supplies were bought with it, the agreement stated that amount was not refundable. 

If final payment wasnt made within 3 days of the event, we had the option of not perfoming the

event and (supposedly) still not refund the deposit, as withholding final payment was in breach. 

But he never went to court that Im aware of. 

 

But the contract was defintely entered into by the client through their own signature, never just a 

clause that defined certain actions as being legally binding. 

 

OP actually stated that the client was signatory to a contract: "***On their signed contract: "

 

"Cancellations after 12/18/15 forfeit any monies paid... 

 

Any monies paid is acceptance of the terms of this proposal.". '

 

The 2nd statement is still in question, however that first statement seems pretty standard to me 

in catering and may well present as binding in court.

 

lI suppose a  Lesson to be learned here is to be discerning in how you accept payment--in virtually

every case Ive heard of the clinet cheating the caterer (that didnt go to court) has been due to

payment by personal or company check, that was either NSF'ed or stopped. 

 

But I do agree it's attorney-time--at least an initial consult to review the contract. 

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