Thanks, SCP, for the alternate view. I really appreciate hearing all sides of the argument. I actually have a bachelor's in Sales and Marketing, as well as my MBA, so PR issues are ones that I'm familiar with, and also the reason for my hesitation regarding this issue. The lawsuit wasn't what I've been concerned with; it's the negative publicity. This is a group of people I have done many, many cakes for over the years, and this is the first time a cake disaster has happened. As I had mentioned earlier, though, this group has become increasingly more difficult to deal with, and are ones I personally and professionally, no longer wish to do business with. I made the mistake of letting a sob story pull at my heart string and I lowered my price greatly on a cake I did from them, and from there on out they have expected/demanded that same discount, while also wanting more and more in regards to their cakes, deliveries at unusual times, and constantly ordering cakes late (ie: call on Monday for a 4 tier cake to feed 300 on Saturday). I already tried explaining things to this group to try and get this professional relationship back on track, but they have flat out said that because they have been long time clients of mine, they deserve the discounts and special treatments. So, as far as my reputation within their group, eh. I hate to see it tarnished because they know first hand the work I do, but I also don't want their business anymore.
I will say, though, that had this entire situation happened with a different group of people, a group that truly has never seen my work, or maybe just seen a few examples and then experienced a cake disaster, my reaction would have been different. I more than likely would have refunded the money, and still offered to do the wedding cake for free, or offered a groom's cake or other cake, as a chance to redeem myself. (Assuming of course, the original wedding party hadn't threatened bodily harm to myself and my staff, and these clients hadn't barged into my office with threats of lawsuits and negative media coverage.)... In fact, even in this situation I might have done something similar if all that hadn't happened. It's the whole honey and vinegar mentality.