This sucks but it is a hard lesson about dealing with large companies. If any company wants anything that doesn't comes off the shelf of the store, they have to pay upfront. Pay has to be by a certain amount of days in advance of delivery date or the date is not guaranteed and will be late. Work doesn't start until payment is done. If they want to pay after delivery, sign a contract, require an advance of at least half of the bill or materials cost (whichever is highest), non-refundable, include a cancellation fee. Put this shit up as terms of service on a website and direct everyone to that page whenever you are contacted by a new client. The larger the client company, the more important it is to be this strict. For you it might be a bankruptcy inducing amount, but to them it will be immaterial pocket change, so you have to hold your ground.
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I was a small business owner in this same situation. I got a contract, I got partial payment up front, then they reneged upon my finishing the job and asking for the rest of the payment. They said they'd pay me 10% of what they owe, AND demanded additional services for free. I took my contract to a bunch of lawyers, all who said the same thing "They're too rich to sue. They will delay, stall, and after years, even if you won, they still probably won't pay." What they owed me, they bragged about paying every time they flew their private jet. They could easily have paid, but instead they decided to destroy me and my company.
This isn't something the small business owner can protect against. To the rich, none of us or our laws matter.
The partial payment wasn't large enough if it left you wrecked at the end. Generally the partial payment should pre-pay to cover all of your expenses and labor. The final payment is the profit margin. That way you are never on the hook for a potential loss and will always break even.
So for the bakery, they should have had a full prepay policy on all special orders. Even if "customers" walked away because of the policy.
I don't know what you think profit margin is but it's not much. At the point of getting full expenses you might as well ask for full payment.
Yeah then at least everyone gets paid, and the workers walk away with a shitload of free pies!!
Name and shame my dude
*Reneged :)
The rich no longer fear the guillotine.
This is why small claims exists. $7500 and THEY have to prove they DON'T owe it. If they don't show up, you win summary judgement. That should cover most things and even if it doesn't, it will all least soothe the wound.
Can you tell us who? Maybe someone will “run into” them.
It is fascinating to watch the rise and fall of Tesla's reputation. They went from "the cool brand" everyone wanted to something that automatically gets you labelled as a sucker and a douche, almost overnight.
That's usually what happens when a douchebag worms his way into a company, takes it over and squanders it.
Sadly, Musk built the cool brand reputation before destroying it, so this doesn't really apply. Nobody ever really heard of Tesla - the car brand - before Musk.
This was my first exposure to Tesla
I'm tempted by Lucid products right now.
There is such a power disparity between large corporations and normal people or small businesses. A corporation can make a small decision that would devestate a person or small business and it doesn't affect them at all.
I don't think this is legal, since it's a custom order. This is not like a consumer ordering an off the shelf product, it's more like a verbal contract IMO, but IANAL.
depends on the cancelation clause, usually there would be a time frame before the event they could cancel. There should also be a deposit-especially for events this large...non refundable would have been ideal especially if you need to get materials & OT for staff.
They exchanged an invoice which is closer to a quote unfortunately, as invoices are not contracts with clauses.
What sucks is it would cost her more in lawyer fees to sue than she lost. Fuck Tesla.
I don't think you can bring a lawyer to small claims court, to prevent this exact scenario. Tesla might send a manager or nobody. They can't send their legal team.
Who Can File or Defend a Claim?
Corporation or other legal entity — A corporation or other legal entity (that is not a natural person) can be represented by a regular employee, an officer, or a director; a partnership can be represented by a partner or regular employee of the partnership. The representative may not be an attorney or person whose only job is to represent the party in small claims court.
IDK if 16k is small claims, but if it is, she should definitely take it there.
Yeah, if you're an inexperienced caterer this is an unfortunate lesson.
big companies don't care, they are rich enough that they don't have to abide by contracts with little people.
So if Tesla is stupid enough to order again, she can say Okeydokey I'll be right on it, and when the delivery is due, she can just say Sorree I'm not gonna deliver anything anyway, have a nice day?
That's not a viable business environment, and surely there must be regulation to prevent businesses fucking each other off like that.
I'm not blaming the business owner here but not collecting payment upfront was a monumentally poor business decision.
I'm betting managers were planning this, but when Musk found out it was for black history and ordered it canceled.
And while it is easy to just get paid in advance, sure, but that is a double-edged sword. Many companies and wealthy individuals will just use another company.
Then let your competitors wind up losing thousands of dollars when they cancel on them.
or making a life changing sale, it's a gamble.
If someone else wants to gamble their livelihood, that's on them.
Companies usually don't. It only makes the news when they do.
Worth noting sometimes companies often restrict expenses with crazy requirements. Sometimes they have no choice because they are prohibited from paying for something like food in advance.
This is my thought as well. Such a predictable pos.
Should have told him it was for Musk Appreciation Month.
Seems like it would be fairly simple to at least sue them in small claims court. California allows up to $6250 for businesses.
I’m really surprised that, given the size of the order and the tight time frame, that she didn’t ask for the money up front…
But yeah. If she has anything in writing she should go to small claims 100%
I used to live down the street from The Giving Pies when they first opened. They make great pies and the staff were really nice. Sucks to see this news!
https://www.ktvu.com/news/business-booms-at-san-jose-pie-shop-after-tesla-backed-out-of-large-order
The pie shop is doing better now than it ever was and Musk now has a new pile of shit he just stepped in, all in all a happy ending
The article does not say that she recouped her losses, so I'm not sure if it really is the happy ending you're claiming.
Don't get me wrong, it's nice that the San Jose Sharks made a $500 order, but she's out $6000 and I think the article would have mentioned if she made that and more back.
Tesla seriously fucked this woman over. And not just that, but fucked her black-owned small business over by claiming the order was for Black History Month, which makes it far, far worse. The only one who can make it up to her is Tesla.
Man this is some trump tower level bullshit tbh
Rasetarinera says after her story went viral, Tesla offered to buy the pies and a tour of their factory. She says she still hasn’t received a payment, so she’s focusing on other customers like the San Jose Sharks, who spent $500 on pies after hearing her story.
Even more. Literally then teased her again.