Confirmed reservation definition is something you need to know if you own a business that allows customers to book transportation, accommodation, rental, food, or other services in advance. A confirmed reservation may or may not be a legally binding contract, depending on whether it meets certain legal requirements.

What Is a Confirmed Reservation?

A confirmed reservation refers to a written statement from a transportation company, hotel, rental agency, or other service provider confirming that it has received a request for a reservation and will honor it. The reservation can be guaranteed or non-guaranteed. While a verbal confirmation is virtually worthless, a written or emailed confirmation may also have implied or clearly stated limitations, such as a timeframe in which the customer must pay for or use the service.

When Does a Booking Become a Legally Enforceable Contract?

Online and telephone reservations are part of everyday life for restaurants, but many of them are canceled every day. So, when does a reservation become a commitment? Under English law, the requirements for the formation of a legally binding contract include:

  • Offer from one party.
  • Acceptance of the offer by the other party.
  • Payment of consideration, such as money.
  • Proof that both parties intend to be legally bound.

It is not mandatory that a contract is made in writing, meaning that it can be formed online or over the phone.

Offer and Acceptance

To determine whether or not a contract is established when a customer makes a reservation, you need to see if the four requirements above are met. The first two requirements can be easily satisfied.

When a restaurant receives an inquiry about a table reservation, it makes an offer to the customer when it lets the customer know that it has a table available at the requested time, for the required number of diners, or offers a suitable alternative. Then, the customer accepts the offer by confirming that he or she will proceed with the booking on those terms. With that, the table is booked.

Consideration and Intention to Contract

Complications begin to arise when you address the third requirement, which is consideration. If the restaurant does not ask for a deposit or credit card details, it will be difficult to say that it has received consideration from the customer. In this situation, the parties did not form a legal contract. Alternatively, if the restaurant receives a deposit from the customer, the third requirement will be met, and therefore, a contractual agreement exists.

If the customer chooses to make a reservation by providing his or her credit card details and the restaurant has not taken any payment from the card, it is presumed that consideration has not been paid and a contract does not exist. Nevertheless, this does not take into consideration the reason the restaurant takes the credit card information in the first place.

Usually, this practice has something to do with the cancellation policy of the restaurant, which entitles it to deduct a certain amount of money from the credit card if the customer fails to show up or cancels with short or no notice. By providing the credit card information, the customer acknowledges that he or she will incur liability or “promise to pay” if he or she fails to honor the agreement.

The “promise to pay” can be regarded as adequate consideration required for a contractual agreement to exist between the restaurant and the customer. The presence of consideration indicates that the parties have the intention to be legally bound by the contract.

How to Make Customers Honor Their Reservations

To make your customers honor their bookings, you should ask them for a deposit or credit card information to ensure that they are contractually bound.

Create a clear cancellation policy that allows you to keep the deposit or take payment in the event that a customer cancels his or her reservation with little or no notice. Also, the policy should include clear descriptions of situations in which your restaurant has the right to cancel the reservation without breaching the contract, such as if the customer is behaving aggressively. Make sure your customers are aware of your cancellation policy when they are making a reservation and agree to comply with its terms.

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