What is a catering service contract?

What is a catering service contract?

A catering contract is a legally binding agreement that is signed between the caterer or food service provider and the client. Usually, this agreement is set for a specified period (or event) where the caterer provides food and refreshments to the guests at the event.

The client has to pay for the catering services and the caterer has to take care of the food, refreshments, set-up, presentation at the event.

The contract lays down all details as requested by the client and offered by the caterer. Having a catering contract in place helps to set expectations of both parties in writing.

Who should use a catering contract?

Catering service can be a challenging business especially now during the COVID19 situation. To survive in the catering business at this time, it is important to have clients and keep those clients intact. That’s where a contract becomes important.

Catering contracts help caterers, restaurant owners, food joints who are interacting with clients to build a successful relationship. With a contract in hand, it safeguards both the client and the caterer’s interest.

What are the types of catering service contracts?

Nowadays, most events and ceremonies use catering services for food and refreshments to save time and effort. Usually, clients raise a request for a proposal and upon selecting a caterer that best suits their requirement, a contract is signed between the service provider and the client. There are different types of catering service contracts –

Cost-plus contract: In this contract, an estimated quote is already prepared and the service is provided according to the budget. If the budget exceeds or if there are any additional costs or additional services then the client has to pay the difference. If there is a surplus amount that is unutilized, then the amount is re-paid to the client.

Cost-plus guarantee: It is similar to that of a cost-plus contract, the only addition is that the caterer guarantees a certain exceeded budget like the labor cost or profit percentage, accordingly the cost lines are fixed and the amount is charged from the client.

Fixed cost per head: Here a budget is prepared and calculated on a per-guest basis. The client is charged for the number of guests multiplied by the cost per person. This contract is common for hospitality and school events.

Why is there a need to prepare a contract for catering services?

Normally, most of the clients plan the event well in advance. But, there may be occasions where the client is unsure about the event and may cancel at a short notice. At times, the client may even deny to pay for the work that is already done. This situation affects the caterers and their businesses.

Also, sometimes the caterer may cancel the service at short notice or deny to provide a certain agreed service. This situation can affect the event and the client’s reputation.

In this type of situation, a catering contract will always help both parties. It will clearly outline the terms and conditions that both parties agreed to. Apart from this, there are few other benefits of having a contract.

Detailing of the work: A contract outlines complete details of the event especially the menu. This might include, standard menu, a special menu for VIPs, kids food etc.

Accommodating changes: In a catering business, changes to the menu may happen at the last minute as well. Sometimes it can be difficult for a caterer to accommodate. With a contract in hand, it helps both parties to understand when and how to accommodate those changes.

Food quality: Having a catering contract can help to ensure that the caterer maintains the quality of the food served and the food preparation is done in a hygienic condition. It can also help the client to take legal actions if there is any mishaps due to the food.

What should be included in a catering contract?

A catering contract helps to make an event successful. Be it a family ceremony (like a wedding reception) or an official event (like a business meetup), a contract spells out all the responsibilities that should be undertaken by both parties. However, in a catering contract, there are few clauses that should be included and those are:

Event details: This section is important because it addresses all the necessary details, such as what is the event, where is it, the event date, the start time of the event, and the guest count for the event.

Services provided: Under this section, the caterer agrees to provide the services that are requested by the client.

Menu to be served: It outlines the complete menu that should be served at the event or the ceremony such as, what will be served as appetizers, main course, and dessert.

Coordination with the venue: Here, the caterer gets a brief description of the venue, and the point of content to coordinate.

Equipment at the venue: If the client is providing any kind of equipment to the caterer at the event, then this section will define the equipment that will be provided.

General liability insurance: Under this section, the caterer and the event planner insure their staff members to protect them against any accidents or injuries during the event.

Payment terms: Under this section, the client and the caterer get clarity about the pricing terms, like whether the payment is an hourly rate or a fixed price for the complete event, when the payment should be made, how it should be made (using a credit card or online payment), and whether there is any kind of advance deposit that the customer needs to make while onboarding catering services.

Cancellation Policy: If either party wants to cancel this contract, then this clause states how they can do it, and what will be the notice period.

Miscellaneous: Apart from the above major clauses for a catering contract, there are certain clauses that should be included like the force majeure clause, waiver clause, governing law (under which laws of the state the contract is abided by), and severability clause.

Why should catering services start using Revv?

Usually, a catering company has to list down all the services they provide and send them to the client for payment. It is normally done at the end of an event. This can be a very long and hectic process, especially when the caterer has to request for payment right after the event.

To help businesses (majorly the small business) in such situations, Revv provides pre-drafted and easy customizable contract templates that have in-built Stripe payment integration. All the contract templates at Revv come with easy eSignature, for instant acceptance and signing.

The difficult task of drafting and listing the service is now made easy with Revv and all that you have to do is sign up, and start using the legally vetted catering contract template.