We live in Western New York and operate a very small sole proprietor run marketing/advertising concern...We sell advertising on various publications via telephone to local area businesses. We recently sold placemat ads for local restaurant that has been in existence for better than 10 years.. we placed the placemats w/restaurant, only to have restaurant close it's doors. We, at this point are unable to reach owners to get placemats back so as to attempt to place w/another restaurant in area for the benefit of the advertisers who were under the assumption that the placemats would be in restaurant and on tables through the winter months...we are now concerned that we will be asked for refunds by businesses and are wondering, being that there was not a written contract, other than invoice stating the purchase of ad on placemat w/no mention of how long they would be on tables in restaurant, if we would be legally bound to provide the refund? The only mention of time on placemat was during the phone conversation/sale. We had no idea of the restaurants intention to close it's door....
1 Answer from Attorneys
You have a fantastic business idea, however, you are approaching the idea in an unprofessional manner. Any contract you have should be in writing; whether with the advertiser or restaurant. All contingencies should be provided in the contract ahead of time. In order for your business to survive, you need to establish good will, unless you want to operate as a fly by night concern. Replace the out of business restaurant with a new one (free of charger even if it means out of pocket expenses and ensure that the advertiser is aware of your performance) and think very carefully about the terms of the contracts you wish to incorporate in your offering hereinafter.
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