Find your way with our blog

COMPASS

We want to give you as much value as possible. Our blogs and newsletters cover everything from T slips and tax deadlines, to tips on staying organized, and recommendations on great books for small business owners. 


Subscribe to our upcoming newsletter for small business advice, and financial and tax tips for entrepreneurs.

Cancellation policy: should you include it in your contract?

This is a guest post from Goodlawyer, a trusted partner of True North Accounting. Goodlawyer’s North Star is to get more people the legal help they need. Goodlawyer empowers clients and lawyers to work together in a way that’s better for everyone. By leveraging technology, they improve the experience for both clients and lawyers — all while respecting their unique relationship and protecting their data.

I am sure that you have seen cancellation policies many times – whether it be at your doctor’s office, a family photo shoot or a meeting with your business coach. The cancellation policy sets out the rules for whether a client can cancel their appointment and if they can, how much money is at stake (if any). As a business owner, you want your clients to keep their appointments with you. If clients cancel at the last minute, that leads to lost time and lost revenue. A double loss you probably can’t afford. For this reason, it is essential to include your cancellation policy in your services contract.

Your policy sets out specifically when a client can cancel and what the repercussions of cancellation are. Will they lose their deposit? Will they be able to reschedule without a fee? Will they be charged an administration fee? Ensure that everyone is on the same page and do not leave anything up to interpretation.

There is no governing law as to what must be in a cancellation policy; it really depends on what is acceptable to your clients and your business model.

Some business owners may be hesitant to include their policy in their written contract. They may feel that it comes across as too harsh or is not “on brand”. In my opinion, having your cancellation policy in your contract shows that you are a professional and that your time is to be respected. Not only that, but in some industries like professional coaching, it holds clients accountable. They cannot cancel an appointment at the last minute just because they have not done their homework.

Including your cancellation policy in your contract also ensures that everyone is on the same page and serves as a reference point if cancellation becomes an issue at a later date. Of course, life happens and a client may have a valid excuse why they cannot make an appointment and they genuinely have to cancel an appointment at the last minute. I’m not talking about someone having a bad day and not wanting to drive across town to meet you for your appointment. I am talking about a legitimate excuse, such as a medical emergency. In these cases, you may be willing to cut them a little slack and not follow the cancellation policy to a T.

If you decide not to abide by your policy, does that make your policy or your contract null and void? Provided that you have appropriate language in your contract you do not have to follow the policy every time. How do you do this? Ensure that you have a waiver provision in your contract. A waiver provision is typically found at the end of a legal contract. Essentially it says that if a party waives a right or power under the agreement, that party is not waiving that right or power indefinitely. In non-lawyer language this means if you don’t charge a late fee as required in your cancellation policy, that does not mean that you are waiving your right to charge a late fee again in the future. Basically you are giving your client a get out of jail free card. But just this one time. After that, it’s business as usual.

If you are looking to draft a contract, or have a lawyer look over your existing one, we recommend you visit goodlawyer.ca for affordable legal help.

Read more about Small Business Basics topics that may be helpful to you and your small business. 

Comments (0)