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How to Handle Client Disputes With Grace
Here are five contract terms to include as preventative measures before there’s any chance of a dispute.
6 Min Read
In a perfect world, every client project would end neatly with a happy customer and a glowing five-star review. Of course, business isn’t always so simple—and, at times, every event professional encounters a situation that leaves a client unsatisfied. Fortunately, there are plenty of ways to prevent a dispute from evolving into a legal matter.
In many cases, you can avoid a messy battle of attorneys with an airtight contract and a few proactive habits. But to handle a client dispute smoothly, you must have the proper foundation in place long before there’s even a hint of conflict. And when it comes to future-proofing your business, everything starts and ends with your contract.
A detailed contract is the first line of defense when preventing, preparing, and dealing with client disputes. It prevents misunderstandings, defines how conflict is addressed, and sets the tone for your entire client relationship. So, if you don’t have an attorney-approved (or better yet, attorney drafted!) contract, consider that the top priority before selling or providing any more services. And if you do have a contract, it’s worth revisiting it annually to confirm it covers your bases.
Whether you’re drawing up your first contract or freshening up an old one, here are five terms to include as preventative measures before there’s any chance of a dispute.
1. An accurate description of services
Every contract should include a crystal-clear description of the services included and, if appropriate, services excluded. For example, if you are not a planner, you may want to clarify that you are not responsible for preparing a day-of timeline or overseeing other vendors.
2. A detailed outline of payment terms
Include a payment schedule, noting the total amount owed, the number of installments, and payment due dates. If you require a retainer, specify that the amount reserves the services and the event date and compensates you for turning down other work. Be sure to factor in other line items like travel fees, design fees, and service charges. Lastly, state the consequences of late payments, whether a late fee or an event of default. When it comes to payment terms, it’s always better to err on the side of overexplaining instead of leaving anything to question.
3. Clear policies regarding rescheduling, cancellation, and force majeure
Thanks to the pandemic, most event professionals are all too familiar with these terms—and the danger of leaving such policies out of a contract. If you haven’t addressed these clauses yet, consult with an attorney as soon as possible to guarantee adequate protection of your interests.
There is no standard way of handling these provisions, so it’s ultimately up to your personal policy and what you deem suitable for your business. Will you allow more flexibility for unavoidable circumstances (e.g., a weather event) than personal changes (e.g., a couple breaking up)? If so, clearly outline these situations in your contract. Consider the type of service you provide, how many events you do, and how much you charge to determine the best course of action for your business.
When it comes to rescheduling, be sure to charge for extra work entailed (i.e., meetings, emails, vendor negotiations, etc.). You’ll also want to ensure you can charge for year-over-year fee increases to make sure you are being paid your then-current rate on the new date. For cancellations, set a firm deadline for when a client must pay in full—especially when the client is the one choosing to cancel the event.
If clients show concern about these terms, encourage them to purchase event insurance in case of weather events, illness, and other circumstances beyond your control. Your business bank account is not their insurance policy.
4. A two-sided default provision
When one or more parties are unhappy, there should be a well-defined process for terminating the agreement. Set clear terms about the procedure for giving notice and attempting to resolve the situation for both client and service provider.
For instance, a client may default for late payments, lack of communication, or a breach of contract. You should have the right to end the contract, retain the money you’ve earned, and potentially collect the remaining balance of the fee owed. On the other hand, a client should have the right to back out if you don’t perform the agreed-upon services or fail to communicate.
On either side, the aggrieved party should give fair notice of their dissatisfaction. It’s common to allow 30 days to fix most situations, and if left unresolved, the non-defaulting party will have the right to end the relationship. Make sure your agreement clearly states all causes for default on both sides and the process to move forward with termination.
5. An explicit designation of the client
Weddings invite many opinions, and it’s easy to get stuck as the mediator for family drama. Likewise, corporate events can put you in the middle of internal disagreements. Do you listen to the couple or their parents footing the bill? Does the marketing manager or head of sales get the final say? Clarifying the end client (i.e., the final decision-maker) within the contract can save you from many headaches down the road.
Beyond the Contract: How to Prepare for Client Disputes
While a detailed contract is the first step in protecting your business, it isn’t going to prevent conflict from arising. You will still encounter client complaints—whether or not they are justified—so it’s vital to prepare in advance to make it a smooth process. Follow these proactive measures to ensure you have plenty to back up your claims if a dispute should arise.
Save and file all email correspondence: An organized digital paper trail allows you to provide evidence in the case of a disagreement. Create a folder for each client and save all substantive emails, both sent and received. Should the time come that you need to pull up proof of communication, it’ll be as simple as searching a client’s folder.
Save all versions of critical documents: When making changes to any document (invoices, proposals, contracts, budgets, mood boards, etc.), keep a file for each revised version to allow for comparison. For example, if you send changes to a catering proposal and receive an updated version, it helps to have the original copy to confirm the changes.
Review your contract with an attorney: A solid contract only works if you understand what it covers in your business. Schedule a consultation with an attorney and ask to record the call. Then, have them walk through each provision of the contract and explain how you can defend them with clients. You’ll feel more confident knowing your rights and responsibilities laid out in the agreement.
A final note about client disputes: Don’t forget to consider your well-being and mental health. Sometimes, the best choice for you doesn’t align with the “correct” legal decision. Your contract might grant you the right to collect all remaining fees for a cancellation, but if that course of action leaves you feeling uneasy, it’s OK to follow your heart and do what feels best.
No business is immune to misunderstandings and conflict, but it only takes a bit of forethought to ensure you’re prepared to handle it with poise and confidence.
Leah Weinberg is a partner at Oduberg Law, LLP—a New York City-based law firm serving business owners and entrepreneurs.
