Reading the Fine Print: Part 2
Following last week’s instalment on food delivery aggregators, we’d like to present the last and final post in this series, in which we take deeper look at the legality and liability aspects of food apps or aggregators.
Make sure you are comfortable with the payment terms, including timing, as mentioned above. Also, pay particular attention to liability and responsibility when an order is delayed, cancelled or the food has become contaminated. Read the termination provisions and understand whether you can terminate the agreement for convenience any time you want, or whether it can only be upon the aggregator's breach. Also see whether the aggregator has a right to terminate for convenience (without cause). What would that mean for your customers if the aggregator changed their minds about working with you and pulled you from the system?
And what happens once the agreement is terminated? How soon after are all accounts settled? How soon after will your restaurant be removed from their website and marketing materials? If you have made the decision to terminate your contract, the aggregator's prolonged use of your brand may result in reputational damage done to restaurant's goodwill.
Also read the contract to ensure that there are no restrictions on your ability to use any other similar platforms, including competitors of that aggregator. And be sure to understand the indemnification provisions. When one party indemnifies the other, it means that they will reimburse the other party for any third party losses suffered by that party as a result of the acts or omissions of the first party. Put another way, if the aggregator's delayed delivery results in a contaminated product and the customer gets sick and sues the restaurant, can the restaurant rely on an indemnity by the aggregator and get reimbursed for its losses and costs?
Innovative technologies, which connect restaurants to their customers in different and exciting new ways will continue to evolve, and many of these opportunities may warrant your restaurant's consideration. Make sure you understand the legal terms you are agreeing to, the liability you may be assuming, the liability the platform may be assuming and the internal bookkeeping practices which ought to be adopted in order to make sure that you are not caught by surprise, facing angry customers and owed lots of money should the relationship ever sour.
Chad Finkelstein is a franchise lawyer at Dale & Lessmann LLP (www.dalelessmann.com) in Toronto.