Verbal contracts

[Solitaire Events Ltd]

If someone has agreed to book your services over the phone and you then send paperwork, contract and T&Cs, does the initial verbal contract exist and count if someone decides to cancel you without having signed and sent the written contract back?

I've had this situation come up recently and have been reading about it, but people seem to have different views and experiences of it.

[Spirits High]

Funny you should mention it.

That's pretty much how that joint 40th booking went the other day.

Agreed to book over the phone , sent an email through my site say ing please book us for that day then when they read the T&C's apparently they were too "Extreme" :eek:

They booked alernate entertainment so would no longer be needing our services.

Wasn't sure how to pursue it. I think that "yes" they had entered into a contract but it would prove hard to enforce it.

I just wished them the best of luck for their party (they'll need it;) ) and moved on. They did say they were sending the booking forms back but they've yet to arrive.

[CRAZY K]

:D
If someone has agreed to book your services over the phone and you then send paperwork, contract and T&Cs, does the initial verbal contract exist and count if someone decides to cancel you without having signed and sent the written contract back?

I've had this situation come up recently and have been reading about it, but people seem to have different views and experiences of it.

I would say offer and acceptance required under Contract Law is not fully complete until they have accepted your T and Cs which I presume are enclosed for acceptance/ signing with your email or letter.

They cant accept them until they read them --if they are on your website they still may claim not to have read them unless you get them to email to that effect--whats the legal effect of emails--thats another problem.:eek:

If they sign saying they have read them thats it.

If you dont use T and Cs I suppose it could be argued they accepted your verbal offer. i.e Verbally -- Our Disco costs £400--ok ill book it.

I wouldnt threaten anyone unless I had a signed Contract on my file--:)

That reminds me--some :Censored: idiot hasnt sent back a signed Contract for 2 weeks time==time to put the boot in;)

Thats my take--

My golden rule is always work on written documents and chase up outstanding Contracts/fees ( unless your in China of course:D ) in 14 days.

If you have someone wanting a date thats been booked already but documentation is outstanding I issue a warning that if I dont get the outstanding paperwork next day I will take the alternative booking and blow them out.

Its a tough old business--as you know Darren,:D :D :D

CRAZY K

[[email protected]]

Hi Darren

Verbal contracts are legally binding, as even with a verbal contract there are still the three key elements that form a contract. Offer, Consideration and Acceptance.

Our booking system is done on verbal agreements and our contracts are issued as 'written confirmatin of a verbal agreement already made'. (Although, we do now get all the information we need to issue a contract on a confirmation email which asks them to look at our TOB and reply with all the bits we need to issue).

Contract clause:-
This contract confirms the verbal contract already made between artiste and promoter. it is binding and does not provide for cancellation.

Our contracts and TOB have been DTI approved and were drawn up in consultation with them.

I know of an act that successfully sued an agent on the strength of a verbal contract.

The agent called and booked the musician for Xmas day in the morning following a call from the end client, he was about to issue paperwork on it and the booking fell out of bed (in the afternoon). The agent called him to tell him that the job was not going ahead and the musician sued him on the strength of his verbal contract (even though he didn't get any other offers of work in the 4-5hrs between the 1st and 2nd call).

You can always reinforce the verbal agreement in your contracts that you send to clients (get this checked out before use), by using something similar to the text below.

You are requested to sign and return this contract within the next 7 days. Failure to sign and return this contract is not sufficient to cancel the agreement......

Hope that helps....:)

[Pe7e]

I've had this situation come up recently and have been reading about it, but people seem to have different views and experiences of it.

A verbal contract has the same legal validity as a written one, but the problem is in enforcing it. Without independent witnesses it would be near impossible to prove what was agreed to, and by who. Personally I don't consider a booking is confirmed until I get the deposit and signed contract, and I make this clear when a telephone booking comes in, although I do allow time for this to happen. Additionally I have a £25 non refundable 'booking fee payment link' set up on my website which I invite any telephone Booker's to make use of, to secure their chosen date.

[TonyB]

Under the law of contract, a verbal contract is binding i.e. if you make an offer of service and it is accepted then the contract is binding.

At the time the contract is made, the other party must agree to the terms and conditions of the contract.

If you then send a contract and ask for a signature on it, then the contract is not binding until such time as a signed contract is received (that then becomes a term and condition of the contract being binding).

If you just send a contract confirming what was a agreed and don't ask for a signature, then the contract is binding from the time it was agreed verbally.

Under the distant selling regulations, the other party have a minimum 7 day cooling off period.

Problem with a "verbal" contract is if it went to court, proving what was said. Unless the conversation was recorded, then it is your word against theirs.

[Excalibur]

Well I was going to do the famous quote " A verbal contract's not worth the paper it's written on " , but it appears one may be more binding than I had supposed. :o :o :o

[Pe7e]

Under the distant selling regulations, the other party have a minimum 7 day cooling off period.

I would think the same 7 day cooling off period exists even after a contract has been signed, although I've never put it to the test. Recently a forum member (possibly another forum) successfully canceled a yellow pages contract for advertising he had taken out.



Problem with a "verbal" contract is if it went to court, proving what was said. Unless the conversation was recorded, then it is your word against theirs.

You would also need to prove it was actually them, not someone impersonating them.

[rob1963]

Problem with a "verbal" contract is if it went to court, proving what was said. Unless the conversation was recorded, then it is your word against theirs.

My thoughts exactly.

That's why I think verbal contracts are a complete no go.


You would also need to prove it was actually them, not someone impersonating them.

Which is even harder to prove than the details of what was said in the first place.

[Solitaire Events Ltd]

The annoying thing is, I phoned the venue, which is one of my regulars to see if the function had been cancelled and it hasn't.

The client told me "there was a problem with dates"

More like "there was a cheaper company"

Oh well, thanks for the information - this has only happened a couple of times since I've been trading and the last time was years and years ago.

[CRAZY K]

Contract clause:-
This contract confirms the verbal contract already made between artiste and promoter. it is binding and does not provide for cancellation.



Unfair Contract Terms Act---surely no chance!!!!!!!!!!!!!!

That must be unreasonable.:confused:

Also how can you prove a verbal agreement between agent and artist--without a tape recording:confused:

CRAZY K

[[email protected]]

Unfair Contract Terms Act---surely no chance!!!!!!!!!!!!!!

That must be unreasonable.:confused:

Also how can you prove a verbal agreement between agent and artist--without a tape recording:confused:

CRAZY K

Nope, we have gone to court with our contracts a few times.

Our TOB and contracts have been drawn up with the blessing of the DTI and our trade association.

What it means is that it does not allow either party to cancel, client or artiste so it gives the same level of protection to the client as it does the artiste.

i.e. we don't have a sliding scale of charges if someone wished to cancel. By having a sliding scale clause in there you are saying to the client, it's OK to cancel this booking, and it will only cost you XX amount depending upon notice you give me.

This means if you have a sliding scale cancellation clause a client could hypothetically book you for NYE (or whatever date), cancel 6 months in advance for 15% or 25% of the fee. :eek:

Now (i'm not saying that this would happen, but there is a possibility it could), but you may not get another booking or enquiry for NYE (or whatever date), so you would have only earned 15% or 25% of the fee for that night and not the full contracted amount, so you would be considerably out of pocket.:eek: :eek: :eek:

That's why we have non-cancellable agreements.;)

[Excalibur]

The annoying thing is, I phoned the venue, which is one of my regulars to see if the function had been cancelled and it hasn't.

The client told me "there was a problem with dates"
More like "there was a cheaper company"

Oh well, thanks for the information - this has only happened a couple of times since I've been trading and the last time was years and years ago.

One of these days I'll tell you a long story about something similar.

[CRAZY K]

Nope, we have gone to court with our contracts a few times.

Our TOB and contracts have been drawn up with the blessing of the DTI and our trade association.

What it means is that it does not allow either party to cancel, client or artiste so it gives the same level of protection to the client as it does the artiste.

i.e. we don't have a sliding scale of charges if someone wished to cancel. By having a sliding scale clause in there you are saying to the client, it's OK to cancel this booking, and it will only cost you XX amount depending upon notice you give me.

This means if you have a sliding scale cancellation clause a client could hypothetically book you for NYE (or whatever date), cancel 6 months in advance for 15% or 25% of the fee. :eek:

Now (i'm not saying that this would happen, but there is a possibility it could), but you may not get another booking or enquiry for NYE (or whatever date), so you would have only earned 15% or 25% of the fee for that night and not the full contracted amount, so you would be considerably out of pocket.:eek: :eek: :eek:

That's why we have non-cancellable agreements.;)

Interesting.

A few relevant questions---

Do you warn the client before they agree to book you verbally over the phone? i.e. they CANNOT CANCEL for any reason.

Have you ever enforced through a Court a verbal Contract of the type Daz has a problem with---if so please give specific details.

I am aware of an agent whose Contract does mean the client is responsible for the DEPOSIT in the event of not going ahead but I have never heard of total NON CANCELLATION CLAUSES.

Logically do you therefore ask for all the money immediately as they cant cancel?

thanks

CRAZY K

[[email protected]]

Interesting.

A few relevant questions---

Do you warn the client before they agree to book you verbally over the phone? i.e. they CANNOT CANCEL for any reason.

Have you ever enforced through a Court a verbal Contract of the type Daz has a problem with---if so please give specific details.

I am aware of an agent whose Contract does mean the client is responsible for the DEPOSIT in the event of not going ahead but I have never heard of total NON CANCELLATION CLAUSES.

Logically do you therefore ask for all the money immediately as they cant cancel?

thanks

CRAZY K

When a client indicates that they would like to book the act, it is pointed out either verbally and by means of a follow up email that we issue legally binding contracts that do not provide for cancellation, explaining that the act will strike the date from the diary and then turn enquiries for that date down, if they were to cancel the booking then cancellation fees may apply which can be up to 100% of the contracted fee, of course if the contract was unable to be fulfilled by either party to due force majure etc etc, then no fees would be due.

So far we haven't had to take anyone to court on the strength of a verbal booking, however, we have heard of occaisions via our trade association whereby this has occured, but i don't have exact details, only the occaision that i heard about in the initial reply.

If the client expresses a wish to cancel, we then inform the act. At that point it is open to negotiation as to what the amount of cancellation fee is required. In some cases with the notice given the act may take a gamble and accept the cancellation with no fees due, again take a gamble and ask for a nominal cancellation fee in the hope they'll get a replacement booking (effectively a buyout of the contract). This would be the only occasion that we would request the fee prior to the date which is to be cancelled.

If the notice is not sufficient to obtain a replacement booking the act can request that the full fee is paid, this does not become due until the date of the function. The total amount of cancellation fee paid by the client would depend on whether the act has managed to mitigate their loss in anyway.

i.e. if the original booking was for £3000 and the act managed to get a replacement booking for £1000 on the night, the client would only be responsible for the difference in fees as the act has mitigated their loss from that cancelled contract.

Clients that cancel do not pay any VAT on their bill either as VAT is not applicable on cancellation fees as no service has taken place. Quite often the acts as a good will gesture may also knock any reasonable expenses they may have incurred travelling to the gig (ie their fuel bill any vehicle hire charges etc etc).

Phew, bit of a rambling reply:)

Cheers
Alan

[rob1963]

I think the reason why people have a sliding scale for cancellation fees depending on the amount of notice given is that the more notice they're given, the more likely they are to secure an alternative booking, so the less they lose out, so the less they therefore need to charge as a cancellation fee.

That's certainly the way I look at it.

[[email protected]]

I think the reason why people have a sliding scale for cancellation fees depending on the amount of notice given is that the more notice they're given, the more likely they are to secure an alternative booking, so the less they lose out, so the less they therefore need to charge as a cancellation fee.

That's certainly the way I look at it.

I can see the benefits of both ways of doing it, we used to operate with a sliding scale years ago, until we were advised not to, it's what works best for you and your business:)

[rob1963]

I can see the benefits of both ways of doing it, we used to operate with a sliding scale years ago, until we were advised not to, it's what works best for you and your business:)

I don't have so much of a sliding scale, as I like to keep things simple.

Therefore, if they cancel a month or more before the function (which two or three have over the years), they don't get their deposit back, although I hold it against any future booking they make (which I think is more than fair, as they don't have to lose their deposit at all).

If they cancel within a month of the function, then full payment becomes due, although I've never found myself in this situation yet.

Simple!

:)

[CRAZY K]

When a client indicates that they would like to book the act, it is pointed out either verbally and by means of a follow up email that we issue legally binding contracts that do not provide for cancellation, explaining that the act will strike the date from the diary and then turn enquiries for that date down, if they were to cancel the booking then cancellation fees may apply which can be up to 100% of the contracted fee, of course if the contract was unable to be fulfilled by either party to due force majure etc etc, then no fees would be due.

So far we haven't had to take anyone to court on the strength of a verbal booking, however, we have heard of occaisions via our trade association whereby this has occured, but i don't have exact details, only the occaision that i heard about in the initial reply.

If the client expresses a wish to cancel, we then inform the act. At that point it is open to negotiation as to what the amount of cancellation fee is required. In some cases with the notice given the act may take a gamble and accept the cancellation with no fees due, again take a gamble and ask for a nominal cancellation fee in the hope they'll get a replacement booking (effectively a buyout of the contract). This would be the only occasion that we would request the fee prior to the date which is to be cancelled.

If the notice is not sufficient to obtain a replacement booking the act can request that the full fee is paid, this does not become due until the date of the function. The total amount of cancellation fee paid by the client would depend on whether the act has managed to mitigate their loss in anyway.

i.e. if the original booking was for £3000 and the act managed to get a replacement booking for £1000 on the night, the client would only be responsible for the difference in fees as the act has mitigated their loss from that cancelled contract.

Clients that cancel do not pay any VAT on their bill either as VAT is not applicable on cancellation fees as no service has taken place. Quite often the acts as a good will gesture may also knock any reasonable expenses they may have incurred travelling to the gig (ie their fuel bill any vehicle hire charges etc etc).

Phew, bit of a rambling reply:)

Cheers
Alan

So the question of whether a verbal contract is binding is very far from clear and we have no factual case on which to base anything YET.

I follow the Rob approach.:D

I am amazed Rob you have never had a late cancellation, we had two last year, one this year, all paid up after a friendly reminder---cant remember if I put "copy to Solicitor" on the bottom of the letter;)

CRAZY K

[rob1963]

I am amazed Rob you have never had a late cancellation, we had two last year, one this year, all paid up after a friendly reminder---cant remember if I put "copy to Solicitor" on the bottom of the letter

Well...let's be honest, if someone is lucky enough to book me in the first place, there's no way in a million years they'd cancel...whatever the reason!

On a serious note, I've had two or three cancellations over the last few years, but always at least a month before the function, so I've had no need to demand full payment for a gig which didn't happen.

[Shakermaker Promotions]

Personally speaking, I wouldn't count a "Yes we'll book you" over the phone or face to face as a confirmed booking. I would want it confirmed in an email if possible but definitely a signature on a booking form.

Also, silly question maybe but I'll ask it anyway....

What if (for example) Mr Smith calls up on say June 1st and is booking you for a party in 2 weeks time. Booking fee paid and booking forms returned and signed...Obviously, this is 2 weeks before the function date and therefore the cancellation charges are already in force. He then calls up a few days later after sending the forms back and says that he is going to have to cancel.

I know we've done something like this before but how would you deal with that? In theory he could have made a phonecall that has ended up costing him (for example) £300.00.

[Pe7e]

According to the distance selling regulations, the customer has 7 days to 'reconsider' from the time the contract is signed (assuming it wasn't signed on your premises) Details HERE (http://www.oft.gov.uk/advice_and_resources/resource_base/legal/distance-selling-regulations/cancellation-periods) so it would appear he can cancel, and get the deposit back in such circumstances.

[Vectis]

According to the distance selling regulations, the customer has 7 days to 'reconsider' from the time the contract is signed (assuming it wasn't signed on your premises) Details HERE (http://www.oft.gov.uk/advice_and_resources/resource_base/legal/distance-selling-regulations/cancellation-periods) so it would appear he can cancel, and get the deposit back in such circumstances.

All well and good, but see the exceptions (http://www.oft.gov.uk/advice_and_resources/resource_base/legal/distance-selling-regulations/regulation-exceptions) and consider whether the provision of a mobile disco is a "leisure service" "where the supplier agrees to provide these on a specified date or within a specific period". Also consider "services that begin, by agreement, before the end of the cancellation period providing the supplier has informed the consumer before the conclusion of the contract, in writing or another durable medium, that he will not be able to cancel once performance of the services has begun with his agreement"

We offer the right to cancel within 10 days from the date that the verbal contract was made - I ask for booking forms to be returned within 10 days from the date on the letter (which always goes out by email as a PDF AND by 1st class post) otherwise we will regard the booking request as null and void and release the date for others to book. For gigs occuring within 14 days we have a slightly different contract which requires full payment to secure the date.

It's never been tested, but my argument is that what we do could be considered exempt from the DSRs for the reasons shown but in any case we've entered into the spirit of the DSRs.

There is a third argument in the exemptions list that applies to the majority of our gigs - that of "personalised goods or goods made to a consumer's specification" because in about 70% of cases we do personalised prep work such as building video slideshows, premixing of specific music sequences etc.

[CRAZY K]

Personally speaking, I wouldn't count a "Yes we'll book you" over the phone or face to face as a confirmed booking. I would want it confirmed in an email if possible but definitely a signature on a booking form.

Also, silly question maybe but I'll ask it anyway....

What if (for example) Mr Smith calls up on say June 1st and is booking you for a party in 2 weeks time. Booking fee paid and booking forms returned and signed...Obviously, this is 2 weeks before the function date and therefore the cancellation charges are already in force. He then calls up a few days later after sending the forms back and says that he is going to have to cancel.

I know we've done something like this before but how would you deal with that? In theory he could have made a phonecall that has ended up costing him (for example) £300.00.


SEND AN INVOICE:)

We always HIGHLIGHT Cancellation conditions in writing when sending the Contract, ESPECIALLY IF ITS TICKETED.

I would also verbally mention the cancellation conditions during the first phone call.

If the customer cant read its not my problem--after all its not unknown to get several short notice bookings on the same date ;)

We once had a lady phone up at the last minute and ask if someone wasnt doing anything would they like to cover her event for half price--doing us a big favour you understand.:bang:

I said if you phoned Dynorod in an emergency and asked for a 50 per cent discount what do you think they would say--ill answer that :Censored: off!

CRAZY K

[rob1963]

Personally speaking, I wouldn't count a "Yes we'll book you" over the phone or face to face as a confirmed booking. I would want it confirmed in an email if possible but definitely a signature on a booking form.

I'm similar to that, although I wouldn't even count an email saying "yes we'll book you" as a confirmed booking.

I send out the paperwork, but It's not a confirmed booking until the day I receive the signed booking form and deposit.

[CRAZY K]

I'm similar to that, although I wouldn't even count an email saying "yes we'll book you" as a confirmed booking.

I send out the paperwork, but It's not a confirmed booking until the day I receive the signed booking form and deposit.

And the cheque goes through without bouncing;)

CRAZY K

[rob1963]

And the cheque goes through without bouncing;)

CRAZY K

Indeed...but I took that as a given!

:D

[DJMaxG]

If someone has agreed to book your services over the phone and you then send paperwork, contract and T&Cs, does the initial verbal contract exist and count if someone decides to cancel you without having signed and sent the written contract back?

You're probably going to say this is not a sufficient source, but according to Ellaskins the Verbil Contract still exists etc as it's a Contract.

But can not be used as evidence in Court.

If you've asked for a £50 deposit, you're fairly safe anyway, as people will be determined to get it back, and are less likely to cancel.

[DeckstarDeluxe]

From my experience in my day job and in regards to employment law that while an verbal contract is legalling binding. To be used in court it needs to be backed up by an written contact.

With distance selling acts etc.. it may be slighty different.

[Solitaire Events Ltd]

but according to Ellaskins the Verbil Contract still exists etc as it's a Contract.


I didn't know he was a solicitor...:p

[CRAZY K]

I didn't know he was a solicitor...:p

:Laugh: :Laugh:


Referring to your OP we still have no hard evidence that a verbal booking of a Disco is enforceable even if its stated to be so at the time of the conversation.

CRAZY K

[rob1963]

:Laugh: :Laugh:


Referring to your OP we still have no hard evidence that a verbal booking of a Disco is enforceable even if its stated to be so at the time of the conversation.

CRAZY K

Indeed.

How on earth could you prove that a verbal contract had been made?

:shrug:

[DeckstarDeluxe]

the only way to enforce a verbal contract is to have a recording of it. While the verbal contract does exist if it should go to a small claims court etc... they will not recongnise it unless you can prove it

[Solitaire Events Ltd]

the only way to enforce a verbal contract is to have a recording of it. While the verbal contract does exist if it should go to a small claims court etc... they will not recongnise it unless you can prove it

And you know that for a fact do you?

[DeckstarDeluxe]

And you know that for a fact do you?

Yes. 100%

[Solitaire Events Ltd]

Yes. 100%

Have you got a link to this piece of legislation please?

I'm just wondering as people earlier in the thread had a different view.

[Solitaire Events Ltd]

http://www.contractsandagreements.co.uk/law-and-verbal-agreements.html

Not sure where your info comes from Neil.

[DeckstarDeluxe]

Have you got a link to this piece of legislation please?

I'm just wondering as people earlier in the thread had a different view.

I dont have a link for this no. Im going off two cases regarding the day job where staff were sacked and they claimed unfair dismissal due to "verbal contracts". Long and short of it was it went to a employment tribural and both cases were thrown out straight away because that was all their evidence. Our legal team also forecast this outcome. Like I said the contract does exist if its verbal however if it does go to a third party then you need to prove it. Otherwise I could say I was verbally told I'd get a pay rise of 200% and never got it...

[Vectis]

It's my understanding that you need to get the caller's consent before making the recording otherwise it's inadmissible.

[Solitaire Events Ltd]

I dont have a link for this no. Im going off two cases regarding the day job where staff were sacked and they claimed unfair dismissal due to "verbal contracts". Long and short of it was it went to a employment tribural and both cases were thrown out straight away because that was all their evidence. Our legal team also forecast this outcome. Like I said the contract does exist if its verbal however if it does go to a third party then you need to prove it. Otherwise I could say I was verbally told I'd get a pay rise of 200% and never got it...

That may have been the case in your day job, but read the link I posted. It's not as black and white as you think, which is why I questioned your post.

[DeckstarDeluxe]

That may have been the case in your day job, but read the link I posted. It's not as black and white as you think, which is why I questioned your post.

Only reason I posted what i did was its been qualitified twice in real life cases rather than reading off the internet and naturally being law I wouldnt post anything that was not fact.

I cant really comment on your link.

[Solitaire Events Ltd]

Only reason I posted what i did was its been qualitified twice in real life cases rather than reading off the internet and naturally being law I wouldnt post anything that was not fact.


Unfortunatley you did though. Maybe it was 'fact' with the two cases you are commenting on.

[DeckstarDeluxe]

Not sure how much more of a fact you can be than having two different cases resulting in the same outcome.

Naturally if you get both parties to argeeing on a verbal contract taking place and all the terms were argeed then it is enforceable but then if that was the case why would you be in court in the first place?

[Solitaire Events Ltd]

Not sure how much more of a fact you can be than having two different cases resulting in the same outcome.



I would have though there would be a fair few more cases with different outcomes. Not a lot is it - 2 with the same outcome.

I am not arguing the toss over your cases. I am making the point, as once again, someone has posted something that could be incorrect information and may not apply to all cases.

And I don't want incorrect information being posted on this forum.

[DeckstarDeluxe]

I would have though there would be a fair few more cases with different outcomes. Not a lot is it - 2 with the same outcome.

I am not arguing the toss over your cases. I am making the point, as once again, someone has posted something that could be incorrect information and may not apply to all cases.

And I don't want incorrect information being posted on this forum.

Well thats what the panel decided not me. The law firm we use also said this. Ok in our case it was a clear one party saying there was a verbal contract and the other was not, no other evidence.

[CRAZY K]

Well thats what the panel decided not me. The law firm we use also said this. Ok in our case it was a clear one party saying there was a verbal contract and the other was not, no other evidence.

To repeat, we still have no factual evidence from anyone yet that a verbal Disco Contract has been enforced---

This extract suggests to me that its highly unlikely that you could get anywhere following cancellation of a verbal agreement phone call--

Complete Verbal Agreements
In order for a verbal agreement to be legally binding the agreement must have reached completeness. This means that all terms and conditions have been reached and agreed regarding services and terms of pay. Agreements will be incomplete when there are still further terms and conditions to be agreed. Agreements in principle will not usually be upheld in court and will not usually be considered complete verbal agreements.

Until your T and Cs are seen and accepted ( unlikely over the phone but possible on the net ) its going nowhere.

CRAZY K