LawDepot’s Catering Contract template helps you account for potential contract cancellations by including an optional term for cancellation notice periods. You can also write a specific cancellation policy in our “Additional Clauses” section at the end of the questionnaire.
A notice period is the time frame in which a party can send a cancellation letter to end the contract early. Notice periods typically range between one and four weeks, depending on the length of the contract. By requiring notice for cancellations, you can ensure you're not wasting time or resources planning for an event that won’t happen. Plus, this gives caterers an opportunity to find another client to fill their new availability.
You can also address a cancellation fee in the “Additional Clauses” section of the questionnaire. For instance, if the caterer spent time ordering special ingredients or creating a new recipe, they may ask for a partial payment to compensate for their effort and time. Alternatively, caterers could charge a deposit fee and retain it as payment if the client cancels the contract early. However, if a dispute occurs, keep in mind that courts are unlikely to enforce an overly large cancellation charge.
The cost of the cancellation fee may also depend on how much notice the client or caterer provides. For example, if you require at least 10 days’ written notice and the client cancels within 7 days of the scheduled event, you may be entitled to full event costs. If necessary, research formulas for cancellation fees in the catering industry (often based on notice periods and lost profits) before settling on an amount.