3 Business Lessons from the "Treat Lady" Saga

3 Business Lessons from the "Treat Lady" Saga

 

 

If you haven’t been under a rock, then you know the tragic saga about the Treat Lady. If you have, then here is an article that gives you a good rundown of what is going on.

My cliff notes version of the story is essentially a young lady in Jacksonville, FL was tragically murdered in a triple homicide which included her, her 11-month-old child and her child’s father/boyfriend. A week prior to the tragic murders, the young lady that was killed entered into a transaction with the Treat Lady.  The gist of the transaction was that the Treat Lady will provide her services and goods (preparation of the treats and the subsequent delivery of the treats). The now deceased young lady paid the Treat lady a $350 deposit. It was alleged that there was a contract but unfortunately, this has not been produced. After the young lady was murdered, her family attempted to collect funds back from vendors that she had paid in order to use the money to pay for the funeral. The Treat Lady refused to give the deposit back claiming that it was non-refundable and the young lady who is now deceased had knowledge that the money was non-refundable. She also alleged that there was a contract.

This saga had me thinking about the several business lessons we can all learn from this. I could write an entire book on the many ways this transaction went left but I will keep it short. Check out the three ultimate lessons we can all learn from this scenario:

 

  1. Get an attorney to establish your business: Everyone is up in arms because the internet sleuths have found that the Treat Lady does not have a registered business on Sunbiz. Many of their concerns have been, “How can this woman run a business if it isn’t on Sunbiz?” Well, the problem is, she can do just that. This entity structure that the Treat Lady chose is called Sole Proprietorship. It is a legal entity structure and it is the weakest structure available under Florida Law. Quite often, many people decide to turn their hobbies into revenue-generating businesses. Florida Law does not require business owners to register their businesses as an LLC or Corporation. Not registering your business does not mean your business is not legitimate. HOWEVER, it does mean that you have exposed yourself to UNLIMITED liability to everyone that has the standing to sue you.

You may wonder, what the hell does that even mean? It means that if and when someone sues the Treat Lady, they can attack her personal assets. They can garnish her wages (if she is employed), put a lien on her home, and any other assets that she owns. If her business has any equipment and a business account (assets), they have the ability attack her business assets as well.

One last caveat is that registering your business on Sunbiz is not enough for any business structure. There are a lot of formalities that are required under each entity structure that are not commonly known. Hence, why it is important to hire an attorney to establish your business. An attorney knows the rules required to establish businesses. It is better to get it right at the beginning than to pay thousands of dollars fixing it. Save yourself some time and money and hire an Attorney!

For more information on what type of entity choice you should choose, you should sign up for my Small Business Bootcamp.

  1. No DIY Contracts: Another issue that came up in this entire saga is that once the deceased young lady’s mother contacted the Treat Lady for the refund, the Treat Lady informed the mother that there was a contract and in that contract, it stated that the deposit was non-refundable. Here’s the catch – about 30 minutes after making the allegation that there was a contract, the Treat Lady decided to go onto a Facebook group requesting a “Contract for Event Decorating” from one of her peers. It is unknown if the contract she was requesting was to cover up the situation. But the lesson that we should all take from this situation is that you should NEVER use a contract that was never created or reviewed by a licensed attorney.

It is assumed that the contractual agreement was made either verbally or via electronic communications (text or email) because the Treat Lady has not produced the contract. Under many circumstances, a contractual agreement can be entered into verbally or via electronic communications. However, there are a ton of exceptions to the general rule. You should be very careful with entering into these types of contracts. One of the general rules for the requirements of a valid contractual agreement is that there must be an offer and acceptance of all of the terms of the agreement and not just a portion of the terms. This means that in the case of the Treat Lady, the young lady would have had to agree that the deposit she paid was non-refundable.

The final requirement for a binding contract is that there must be consideration. This means there is a bargain for the exchange. The courts like to see how both parties benefited from the transaction. The Treat Lady benefited because she received compensation for her future services. The young lady would have subsequently benefited by receiving said services. The concern is that due to the death of the young lady, the Treat Lady was unable to render a service. More than likely, it could be argued that the Treat Lady was unjustly enriched. This means that she benefited at the expense of the other party.

There are also many clauses in contracts that should be included before you enter into a transaction. Most contracts have clauses called Force Majeure which means that the contract can be terminated if a situation arises that are beyond the parties’ control. In this current situation, the Treat Lady would have been exempt from performing her duties.

However, many people were also upset with the Treat Lady’s refusal to give back the deposit. This brings me to lesson number three…

  1. Customer Service Skills: With all of the legalities and legal analysis set aside, this entire situation boils down to the Treat Lady’s poor customer service skills. Going back to lesson two, if the Treat Lady had a clause in her contracts that stated that her deposits are non-refundable, and she still refused to give back the deposit, the world would still be disgusted by her actions. While I understand that “business is business,” there is still a fine line in human decency and being a stone cold, low tolerance business person. Building a business is all about maintaining your reputation while improving your relationships with those in your community. The Treat Lady’s actions were damaging to her reputation as an individual and to her business. People are saying that her refusal to remit the refund of the deposit lacked compassion and was selfish. There is a stark contrast between setting boundaries in business versus being completely heartless. It is okay to make concessions while maintaining your business integrity.

As business owners, we should definitely consider ongoing training on improving our customer service skills. At the height of our careers, there is also still room for self and business improvement. I strongly suggest reading books and attending seminars on improving customer relations. This is where many small business owners lack in skill and is often the reason for the failure of most small businesses. If the Treat Lady were to concede on giving back the non-refundable deposit, her reputation will still be intact and she would still have a growing business. Take a lesson from the Treat Lady’s situation, it is better to lose small and eventually gain big.

If you need an attorney to assist you in forming your business the legal way and drafting or reviewing contracts, do not hesitate to schedule an appointment.

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