What rights do I have regarding a last minute cancellation by a client?

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What rights do I have regarding a last minute cancellation by a client?

I have a catering business. A client hired our company last minute, approximately 2 weeks before the event. They paid for the event in full a

week before the event. There was a receipt that was given to the client showing the transaction. Now 3 days before the event, the client is cancelling

the event but my staff has already purchased all the products for it. The client wants full refund. There was only a receipt given not a contract. Do they get a

full refund? What are my rights as a business considering I purchased product for their event.

Asked on August 26, 2018 under Business Law, California

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

No, your client is not entitled to get their money back. Contracts, either written or oral, are binding. To form a valid and enforceable contract, there must have been an agreement as to what was to be done (i.e. what the law calls a "meeting of the minds"); there must also have been value given, either money given or a promise to do something that was not otherwise legally obligated to be done (i.e. "conideration"). Under the circumstances here, there was an oral contract formed as there was agreement that the client would hire your company to cater and there was an exchange of money paid for such services. Since  you were ready and able to perform, your client is not entitled to a refund. To the extent that the money paid does not cover your out-of-pocket expenses, you can ask that your client pay you the difference.


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