Getting the Food Right

One of the most important ingredients in any successful arrangement with an external caterer is a comprehensive agreement that deals with the rights and obligations of both the club and the caterer.

It’s not unusual for the club and caterer to think at the beginning of negotiations that everything will work out fine. However, one serious risk is if a club lets a caterer in to start operating from the club before the agreement is finalised. This is because once a caterer is using the premises both parties may have very different views as to what the final terms of the agreement should be, and if not resolved the situation may ultimately require a court or tribunal to work out what those terms actually are.

A comprehensive agreement should clearly spell out the club’s right of termination of the agreement. An agreement may have a provision giving the club the right to terminate the agreement without there being a breach by giving the caterer the period of notice set out in the agreement. If the agreement does not have this type of provision or the club wants to end the relationship earlier than the notice period, the club will need to rely on the termination for breach provisions. 

Unfortunately, it’s not uncommon for a caterer to breach its obligations under a catering agreement. The consequences of a breach can be harmful to the club’s business, especially when the breach involves poor customer service or unsatisfactory food, as patrons are unlikely to distinguish between the club and its caterer, and they can be prone to spreading word of a bad experience via social media.

If your club is dissatisfied with your caterer’s performance or believes the caterer is in breach of its obligations, we recommend seeking legal advice early as to the club’s rights (and obligations) when dealing with the caterer. Sometimes a frank and open discussion will resolve the issues, however, often the appropriate course of action is for the club to issue the caterer with a formal “breach notice”.

A valid breach notice will require the caterer to remedy the breach. Usually, the club will need to give the caterer a period of 14 or 30 days to remedy the breach. If the caterer fails to remedy the breach as set out in the notice, the club may be entitled to terminate the agreement. 

However, if a club wants to terminate a catering agreement following the caterer’s failure to comply with the notice, it’s crucial that the club is certain it has in fact issued a valid breach notice. If the club has not issued a valid breach notice, there is the risk that the caterer will claim that the club has wrongfully terminated the agreement and sue for damages. 

Any breach notice is likely to be read not only by the caterer but also the caterer’s solicitor and ultimately a judge or tribunal member. Seeking advice too late may mean that the club can no longer rely on the caterer’s earlier breaches as a ground for termination and must start the entire breach notice process over again.

We can assist clubs in preparing a comprehensive agreement that protects the club’s interests from the outset, or can assist the club in the process of terminating a catering agreement.
Email us today for more information.