Am I Overreacting About This Contract Change?
Business By jenmat Updated 28 Nov 2012 , 8:56pm by FromScratchSF
Ok, so I recently agreed to do a "favor" for a local venue that I have a great relationship with. Not a "real" favor, a paid one. I agreed to do a wedding for new year's eve even though I am already booked.
At the tasting I discovered that the groom is a lawyer (moving swiftly towards retirement age, so he's a GOOD lawyer.)
He seemed nice but slightly condescending. For example, when I went to get my calculator that I had left on my other desk he joked that if "you have to use a calculator, maybe we're at the wrong place!" I joked back that I could charge him $800 for a $360 cake if he'd like to trust my calculations!!! (he got quiet after that)
Anyway, they took the contract home to "look it over" and now I get an email back saying he wants to make changes. 2 of the 3 changes are perfectly fine with me regarding design. However, one of them I believe changes the WHOLE tone of the contract.
Now, my contract is standardized. Everyone signs the same contract, and then we do a separate quote and design form with a sketch, flavors, details, etc. So he is asking to change a standard contract that I have never had a problem with.
My contract says, The Client assumes full responsibility for the guests and agrees to hold Cakescapes harmless from and against all bodily injury, property damage or consequential damages which may result from Cakescapes’ services and provision of the cake.
He wants to add Except to the extent of Cakescape’s active negligence to the beginning of the paragraph. SO, this means (correct me if I'm wrong) that if HE (the lawyer!!) can prove that I was actively negligent for XYorZ, I can be held liable. CORRECT???
Anyway, I already emailed him back asking for clarification and basically saying I am not comfortable making that change. Did I do the right thing?
This order is a total of $400ish. While the money is nice, it barely even meets my minimum order for weddings. I have never done anything to worry about a lawsuit, but just my luck would be that it happens with this guy that an aunt or uncle chokes on his cake.....
Thoughts? Am I overreacting? I tend to do that!
Also, if this guy throws a fit, should I let the venue manager know what went down?
Thanks all, and sorry for the font differences, I was cutting and pasting!
I didn't even have to read the entire thing...you're NOT overreacting. This guy is a lawyer, which is great, but you're a business and you have a contract that is not to be changed, nor has it ever been, so what gives him the right to start the "trend", so to speak - because he's a lawyer? Nope. If I were you I would weasle my way out of that mess because that's exactly what it's going to become. GL
AI wouldn't worry about the change. In the unlikely event of a problem resulting in a lawsuit, your liability insurance provider's attorney will easily have the case dismissed if the problem did not stem from your active negligence. For example, a guest choking on your cake would not be grounds for a lawsuit unless there was a foreign object in the cake that caused the choking.
Looking at things from the customer's perspective his changes seem pretty fair, since your standard contract states that even if you royally mess up and cause damage or injury you are not responsible.
Of course if you don't feel comfortable saying that you should be responsible for making things right if you mess up, then you are free to decline his changes.
ARun for the hills!! For sure he would find something wrong with the cake or as you say someone choking on a slice of it. Noway would I confirm this order and to cover your butt you should e-mail the fact that you will not be making there cake just so your butt is covered come there wedding day and they try to claim that they ordered and confirmed a cake with you.
AFYI, in some states your indemnification clause would be null and void anyway in the event of gross negligence on your part, so if you counter by changing "active negligence" to "active gross negligence" you may not be giving anything away or altering your liability by changing the contract.
Thank you I really appreciate all your input. Jason, since he is a lawyer, I would assume that he is aware of the legality of the indemnification clause, which is why he is trying to change it. I could be wrong though. I will readily admit that I am more artist than anything!
I do have liability insurance, but correct me if I am wrong. Let's say I change it for him, the cake has something happen to it that causes harm and he can prove that it was my fault because of his background. My insurance covers it, but then my premium would go up. Correct? I don't want this person to be able to have that kind of power.
I like your suggestion of active gross negligence. I may counter it. But I'll let it sit for a while. :)
BTW- he already wrote back and admitted that it was a big change, but that he shouldn't be responsible for injury caused by using the wrong ingredients. Whaaa??? I also have a clause about allergens, so I'm not sure what "wrong" ingredients could cause harm.
AOh heck no theres that lawyer talk....sounds like he's saying if anyone can't eat an ingredient that you used to make your cake than they go and eat your cake and become I'll hrs would try and sue you....Nope he can't be pleased. Again ultimate to you but I wouldn't touch this with a ten foot pole and I for sure would let the venue know that you just weren't comfortable making his cake and why
For me this smells like trouble with a capital "T"... why does he feel the need or that he has the right to modify your existing contract? Because he's a lawyer?
The answer to that question would be a big eye opener. Hmmmm
With that said...to give him the benefit of the doubt you can ask him (if you really want to) why he feels that your existing contract is not apparently suitable?
It could be a simple case of him quoting certain aspects from your contract and you in turn to explain the full meaning and so forth (but I doubt this is the case!).
The buck stops with you Jenmat, and what I have realised is this - that a customer has the right to shop around for the cake maker of their choice who meets their needs etc, but as a cake maker you also have the right to accept or to refuse custom.
I have refused business (only once so far) because it was simply not worth the hassle especially where I was too accommodating they still wanted more, so with that I simply sent them an email
"Dear xxxx,
I'm sorry our working relationship has not got off to the best start. I don't think my service is for you as it is not suited to the way you wish to work.
Wishing you all the best with your endeavors.
Regards,
XXXX"
I think you should go with your gut instinct - no amount of money is worth the hassle for one to be dictating/calling the shots.
Where would it end?
When I re-read your thread again it came across as bullying just because he's a Good Big Shot Lawyer whose using his position/title/power to intimidate you etc...I could be wrong?
That's just my two pennies worth.
Nixs
I've been dealing with lawyers for the last 2 years (aging parents and their deaths with a contested will) and have come to have a new (horrible) opinion of lawyers and the type of people that enjoy being lawyers. I'd cross the street to avoid having any interaction with them....even the lawyer on your side (cause they never really are on your side, they are only on their side, making money). (I know writing that makes me sound bitter and biased, I am, based on my real life experiences.)
I find his need to change your contract to protect him and not protect you, unworkable and insulting!
Every professional you deal with from your doctor to the guy selling you flooring and insurance makes you sign their contact to not hold them responsible. WHEN in fact, those contracts really don't mean anything, they don't really stop law suits. Your groom lawyer knows that, he being a jerk when he doesn't need to be.
Someone who has access to free legal services is someone whom doesn't hesitate to wield that sword to scare all around them....and you should be scared unless you have unlimited funds.
Every professional you deal with from your doctor to the guy selling you flooring and insurance makes you sign their contact to not hold them responsible. WHEN in fact, those contracts really don't mean anything, they don't really stop law suits. Your groom lawyer knows that, he being a jerk when he doesn't need to be.
See, this is exactly my impression. While I truly think the guy seemed unaware of his condescension the first time, I was surprised at his testicular fortitude. I shouldn't have been, but I was. The first thing I thought of was that "everybody has this clause!!" At least, it seemed to me that it is in a lot of contracts I sign. There is another section about refunds in the case that the cake is wrong or bad that they get a full refund. So basically this clause was saying you can't take me for everything I have because you didn't like the cake or because little bobby joe has a reaction to any allergens.
I don't have anything against lawyers at all. I just thought it would help everyone to understand the situation.
I sent him an email with Jason's suggestion of "active gross negligence" and we'll see what he says. That way, if I put nails in his piece he can come and get me!
A
Original message sent by jenmat
I do have liability insurance, but correct me if I am wrong. Let's say I change it for him, the cake has something happen to it that causes harm and he can prove that it was my fault because of his background. My insurance covers it, but then my premium would go up. Correct? I don't want this person to be able to have that kind of power.
Even if you don't change your contract, you can still be sued and lose if the plaintiff clears the bar to nullify your contract's indemnity clause in your state.
BTW- he already wrote back and admitted that it was a big change, but that he shouldn't be responsible for injury caused by using the wrong ingredients. Whaaa???I'm not sure what he's talking about either, it may be more productive to just have a real-time phone conversation with him to get to the root of what his concerns are.
Bottom line, if he wants you to make a cake for him (them), there's no need to have all these complications - just let you make the cake, let you do your job. I'm not too sure what all the fuss is about..he's not any different than any of your other clients...he needs to go by your rules...I think you've answered your own question, I wouldn't do it because he's going to find something wrong reguardless, afterall, it would put him in the "spotlight"
AThere's absolutely nothing wrong with modifying your contact at the request of a customer, as long as you understand the modification and are OK with the new wording.
In this case, we are basically talking about codifying what should already be the policy of any reputable business: if you mess up, you will make it right. As a customer, if a business was not willing to take this responsibility in writing that would be a red flag.
A
Original message sent by kazita
I would not call him....than you have no proof of what is said or not said nope emails to show you ccanceled his order
Well, what I see is that it took a lawyer to carefully read your contract and to realize that the clause in question is designed to transfer liability to the customer/signer of the contract.
He IS a good lawyer, and a smart cookie--I'd retain him any time--because I wouldn't sign a contract containing that language, either. He realizes that it IS a big deal. He certainly hasn't tried to sneak it by you or to minimize it. He's trying to clarify where his liability ends and yours takes over--that's a good thing, in my book.
I'm only willing to take on liability for what I can control. When I'm the customer, I can't control what a baker bakes, so why would I willingly sign a document that says I'll shoulder any problems that should arrive from another person's product/process? It's not like I can take out liability insurance for someone else, nor would I want to do so if I could.
If I contact a firework designer to create a display for me and I see a clause that says,
"The Client assumes full responsibility for the guests and agrees to hold Fireworks Plus harmless from and against all bodily injury, property damage or consequential damages which may result from Fireworks Plus’ services and provision of the fireworks."
I RUN if they won't change the contract to state, "Except to the extent of Firework Plus' active negligence"
If his change makes you uncomfortable, then he's just not the customer for you. If your current contract makes him uncomfortable enough, then he'll likely to decide that you're not the baker for him. Just because "everyone" signs it may only mean that "everyone" doesn't understand the full implications of the clause....
Rae
AIt's a one time thing.....it's a wedding cake there are no redos . He's questioning your ability to make the cake to his unheard of expectations....if he's unhappy with your cake you can't redo it yes you can give him a refund or money off his next order but that's what you are trying to prevent in the first place
A
Original message sent by kazita
It's a one time thing.....it's a wedding cake there are no redos . He's questioning your ability to make the cake to his unheard of expectations....if he's unhappy with your cake you can't redo it yes you can give him a refund or money off his next order but that's what you are trying to prevent in the first place
A non-lawyer is no match for a lawyer. You might have a great point, you may be totally in the right. But a lawyer can make shear HELL out of something that seems very small! They can drag things out and blow little issues into hurricanes...........that can take months and years to resolve. Months and months of legal bills at $300. per hour is nothing to laugh about. If you loose, you can be forced to pay your lawyers fees and your groom lawyers' fees, plus any other legal fees for other people (the vendors) lawyer. That's why people settle cases, because the lawyers can cause more harm to you, then whatever the original case was about. It's always cheaper to settle even when your totally right.
Lawyers are friends with other lawyers and judges. Don't be certain you'll get justice, just because your correct. The legal system doesn't work so cleanly.
What Jason is suggesting seems logical and even handed...........but, he's telling you it's o.k. to play with fire. Obviously we all have different levels of tolerance. I have none, I've been seriously burned by lawyers, I'll never go near one again if I can avoid it. I only played with fire because I needed to help my parent, I had no choice then.
Understand that just because you have insurance doesn't mean your business will survive a law suit. I've seen huge food businesses go under from 1 food poisoning case. In IL, Ralph's in Lincolnwood went out of business from one law suit over food poisoning. The vendor who purchased the cake from Ralph's mis-handled (didn't refrigerate) the cake. Before you knew it, several companies were dragged into the law suit. In the end everyone involved went out of business, all but the lawyers (they all got richer).
Insurance means nothing, it might not even pay for your lawyer to defend you. Insurance companies find any and every excuse not to pay out claims. Do we all really know the fine details of our insurance contracts? I bet not! Just because you have insurance doesn't guarantee that you won't need your own lawyer to force them to pay out.
Some people need to get really burnt to understand just how really bad it feels when your the one who gets burnt. Nothing is life is fair, not fires, not the law.
Well, we came to an agreement about "gross" active negligence. He wasn't exactly happy about it, but he agreed.
I don't intend on screwing with this guy's wedding. I was prepared to run away if he didn't agree to these terms, but he did and they are sending full payment tomorrow.
I have NOTHING against smart lawyers. I do have something against customers who ask me to change my policies. I did not create the contract, I used a copy of Doug's and adjusted it to fit my needs and have had several trusted professionals praise it.
I have not dealt with many contracts, but this clause does not seem unreasonable. The fact that someone could come and sue me and my business over a $360 cake is not ok with me. I will always refund money when I have made a mistake, and that is in my contract. But to open myself up to a lawsuit that could take away my house and my child's future is simply not ok. Not over a cake. My choice.
Thanks everyone!!!
A
Original message sent by Stitches
I've seen huge food businesses go under from 1 food poisoning case. In IL, Ralph's in Lincolnwood went out of business from one law suit over food poisoning. The vendor who purchased the cake from Ralph's mis-handled (didn't refrigerate) the cake. Before you knew it, several companies were dragged into the law suit. In the end everyone involved went out of business, all but the lawyers (they all got richer).
http://chicago.cbslocal.com/2010/12/30/rolfs-bakery-to-reopen-after-tainted-desserts-sickened-100/ http://chicago.cbslocal.com/2012/01/10/rolfs-bakery-workers-we-were-left-out-in-the-cold/
Just like in any other profession, there are some good lawyers and some bad lawyers...but lawyers are not magic, and in many cases it's not that difficult to understand what's going on if you do a little research. Modifying your contract to reflect what you would have done anyway just doesn't seem like that much of a risk to me.
A
Original message sent by jenmat
Well, we came to an agreement about "gross" active negligence. He wasn't exactly happy about it, but he agreed.
The fact that someone could come and sue me and my business over a $360 cake is not ok with me. I will always refund money when I have made a mistake, and that is in my contract. But to open myself up to a lawsuit that could take away my house and my child's future is simply not ok. Not over a cake. My choice.Any time you sell food to the public you risk a catastrophic lawsuit (worst case being medical costs + punitive or wrongful death) regardless of what your contract says. It's a very tiny risk, but a risk nonetheless.
That's why it's so important to have multiple layers of protection. Your first line of defense is keeping things out of court with a settlement and/or mediation. Next you have liability insurance, which will provide legal counsel and pay out judgments. Finally you have an LLC, so if for some reason you do have to pay out a large judgment, the LLC can take the hit and file for bankruptcy so your personal assets are safe.
AI hope this works out for you, but no way would I have ever altered a contract for a client, least of all one that pretends he knows what he is talking about.
Attornies have specialties. They arent jack-of-all trades. So just because he has a law degree doesn't mean he is qualified in contract law. See, he wasn't giving you advice on how your contract is illegal, all he did was change the wording to further benefit HIM, knowing that most people would go "huh, well he's a LAWYER so he Knows and I must be wrong!". I assure you, in most cases they don't have a clue what they are doing. They literally rely on you feeling inferior when they waive that law degree in your face.
My advice is to never alter your contract and contact him tomorrow to let him know that you contacted the attorney that prepared the contract that you use and he has strongly advised you to not change your wording.
AOops just realized you already agreed on a change. Best of luck!
That sounded a little odd, so I looked into the story. A wholesale bakery called Rolf's (Ralph's is a grocery store) in Lincolnwood voluntarily recalled their products due to contamination in Dec 2010. They closed to address the health issues and reopened Jan 2011. Then in Jan 2012 they went out of business, probably from the loss of sales and costs of recalling thousands of items. There is no mention of a lawsuit about the food poisoning (although they were sued because they failed to pay their employees before they closed), but even if there was a lawsuit, it sounds to me like the recall was the primary cause of the bakery going out of business.
http://chicago.cbslocal.com/2010/12/30/rolfs-bakery-to-reopen-after-tainted-desserts-sickened-100/
http://chicago.cbslocal.com/2012/01/10/rolfs-bakery-workers-we-were-left-out-in-the-cold/
Just like in any other profession, there are some good lawyers and some bad lawyers...but lawyers are not magic, and in many cases it's not that difficult to understand what's going on if you do a little research. Modifying your contract to reflect what you would have done anyway just doesn't seem like that much of a risk to me.
Sorry, I did spell Rolf's incorrectly, I'm a horrible speller! In fact, I've met the owner of Rolfs many times and have attended many pastry demonstrations in the back of his kitchen (but even his name eludes me right this minute), thanks for pointing out my mistake.
None the less, I do know the behind the scenes story of what happened at Rolfs. I didn't think I needed to explain a long complicated story about Rolfs, instead I summerized what I believe to be true. Your quoting what you found on line in ten minutes as if that's the whole story. Rolfs was a HUGE/HUGE business, not by any means your average Mom & Pop Bakery. They were in the process of opening a giant plant in WI when the food born illness issue happened.......(on top of our decline in business in the US).
There were tons of law suits and posturing between the businesses involved. Perhaps none of them actually made it to trial, that doesn't mean it didn't involve a lot of lawyers and costs. Once they discovered which product was contaminated Rolfs would have been stupid to fight responsibility in court. Had the food poisoning not happened I don't believe Rolfs would have gone under, they were growing enormously at the time. The recall at the beginning was because they didn't know what product was causing the issue. They recalled product to protect themselves and others. It might be something the health department insisted upon (who knows). Then banks loaning money for his plant in WI lost confidence. Had anyone of those things not happened maybe Rolfs would have survived. Rolfs was owned by a wonderful generous person, who gave back to the industry constantly, he is loved through-out the pastry world. I don't know anything about the employee payroll issue other then what I saw on local tv............so I can't address that issue you brought up which has nothing to do with what I was talking about.
But you can't judge a book by the cover Jason. I find the fact that you need to double check what I'm saying to discredit me, unusual.
I disagree that "it's not that difficult to understand whats going on if you do a little research", perhaps not for you, but everyone is not like you....which is why my answer to the question was different then yours.
A
Original message sent by Stitches
Had the food poisoning not happened I don't believe Rolfs would have gone under
Then banks loaning money for his plant in WI lost confidence.This is probably the main reason. If they were highly leveraged and had a bunch of new sunk costs (which they would if they were opening a new factory), the cash flow issues may have done them in. Companies survive recalls and lawsuits all the time, the Rolf's recall just happened to come at the worst possible time. I just don't see how this example applies to changing a contract clause on a custom order, or for that matter your general distrust of the legal and insurance industries.
I disagree that "it's not that difficult to understand whats going on if you do a little research", perhaps not for you, but not everyone is not like you....If you are running a business and do not know how (or do not want to) interpret legal contracts then you should have access to someone who does, otherwise you are flying blind from a legal perspective.
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