There are many risks which come with an event planning business.
The 5 main legal considerations that must be addressed when thinking about starting an event planning business are set out below.
What services will you provide? What services will you not provide?
If you are starting an event planning business, you need to consider what your scope of services will be. Will you be planning everything, including set up, security, foods, drinks, entertainment? What about travel to and from the venue? You should remember that whatever is provided as part of your services, even if it is simply organising a third party service provider, you will take on some responsibility for that part.
You need to be absolutely clear on what services will not be provided. This will help avoid customers coming back with complaints or requesting refunds for services which were never supposed to be included in their package.
Will you offer catering services?
An event planning business does not always offer their own catering services, but some event planning businesses do. If you do, then there are a few extra things to consider. For example, when do guest numbers have to be confirmed, what happens if there are leftovers, and how do you control the quality of the food? What if someone has an allergic reaction – who is responsible then?
Do you need a liquor licence?
Many events will want some alcohol service. If it’s a formal dinner party, the customer may want waiters serving champagne and red wine, if it’s a 21st birthday, they may want a bar. Regardless of what event, if there is alcohol being served, someone is responsible for obtaining a liquor licence. Of course, if the event is held at a restaurant or bar, then there may be no need to obtain a liquor licence as the premises may have one already. But if it is an outdoor event, or at any other venue which has no existing bar or liquor licence, then either you, your customers or the catering company will need to apply for the liquor licence.
What happens if an event is cancelled?
There are many reasons that an event may be cancelled. Your business must have a good cancellation policy in place that clearly sets out when an event will be cancelled, and what the consequences of cancellation are. Will the customer lose their deposit? What happens to out-of-pocket expenses that have been incurred by your business – will they be invoiced to the customer? What happens if the cancellation is due to the weather or other factors beyond the control of either party?
What are you not liable for?
In a good client agreement, there should always be a disclaimers and limitations of liability clause. This is used to set out what your business is not liable for and is there to protect your business. As an event planning business, things that you do not want to be liable for may include, guests being injured at the premises where the event is hosted, a guest having an allergic reaction to the food provided at the event, or the event being delayed due to circumstances beyond your control. You should consider, in light of the services that you will be providing, what your business will not accept any responsibility for.
It is extremely important that you obtain the proper licences for your event planning business and that your business has a good strong client agreement in place.
If you are unsure of what else needs to be considered in starting your event planning business, you should speak with a business lawyer today! Your business lawyer can guide you through the possible risks of your business and how to mitigate these risks, and he or she can also assist with the drafting of the necessary legal documents which may save you plenty of time and hassle in the future.
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