OMG!!! I have a situation and I'm not sure how to handle it. One of my coworkers discovered through facebook that I have a small side business making custom cakes. She was planning her wedding and had discussed with me that she was having a difficult time finding someone to do her cake. She said that she had been to a few popular bakeries but was displeased with the taste of their products. She asked me to do a tasting for her and after the tasting said she was very pleased and wanted to put in an order with me. I told her that I needed her order with a 50% deposit no later than 1 month before the wedding date. I assumed that this would be an easy order since we work together and this was her wedding cake, I mean screwing over someone you work with could make for a very uncomfortable work relationship, of course she wouldn't make this difficult. To make a long story short not only did this woman not get the deposit to me on time but the day the wedding cake was due she gave me some story about why I couldn't collect the balance and has been avoiding me ever since. It has been 3 weeks since I delivered the wedding cake and I have not been able to collect on the $240.00 balance! She sent me an email on Wednesday promising to pay me on Friday (payday) and when Friday came she stood me up! I'm so upset about this situation. She deliberately took advantage of our working relationship in order to get a wedding cake and because there is really nothing our supervisors can do about it because it has nothing to do with work, she will probably never pay me To add insult to injury, I gave her icing in 3 of my favorite icing containers for the tasting and she hasn't returned them!!! SMH...I just don't know how people can do such things!!!

Unfortunately it's people like this that make us have ironclad contracts and collect all of our money upfront before the cake is ever made.

I'm sorry for you because you're out the money and now you have an awkward situation at work.

Hopefully, if she has a conscience, it'll get the best of her and she'll pay you.

I guess this incident will force you to review your payment policy going forward.

Good luck!

Perhaps you should pay her a visit in person on Monday and remind her that you'll need the check by the end of the week. Stop by again in person on Friday when she "forgets" the check and remind her. Then continue stopping by and asking her about it (in person) every day the following week.

If you have her home phone number you could also use that to remind her on the weekends.

If this does not work you can send her a letter informing her that her unpaid balance is due on a date in the near future (2 weeks or so), and that you are looking forward to the balance being paid on time so legal action will not be necessary.

The next step would be small claims court.

This only applies if you are operating a legal business (according to your state's food safety laws). If you are operating illegally and this person finds out, things can get worse for you.

And of course now you know that you need to enforce your policy, so if you don't get a deposit on time the order should be automatically cancelled.

I feel for you, you have been given great advice, so ditto, hope you are legal, if not, tread carefully, a lot of people have issues with being paid up front. You usually don't pay a painter for work that has not been completed, but keep in your mind the following, the cake business is completly different, you are holding a spot for them once they have paid the deposit, balance always paid in advance. Enough said, hope everything works out for you. Such a shame, I could never feel good about either eating, serving or wearing an article of clothing that was not paid for in full.

Id catch her off guard on pay day or maybe the day before "Hi ____ I need to get the balance from you today" Keep smiling and never leave her side 'til check is in hand. It is difficult to deal with coworkers so important to keep things cordial.

Jason is right in that you only have legal recourse if you are operating legally. Even if you have a contract, courts cannot uphold illegal transactions. I would make it uncomfortable for her. Stay on it and make sure you are the squeaky wheel. You may be better off offering her a payment plan.

If you are operating legally, take her to small claims. She has a job, so you can attach her wages for the amount due, all costs, and interest. You will have to pay out some money, but it will come back to you.

It's already uncomfortable, so I would go ahead and present her with an invoice outlining what is owed and then tell her if you're not paid by such and such date, you will have to go to small claims court. which you will win, and not only will she have to pay you, she'll have to pay for your filing fee as well! And if she doesn't pay you even after that then your office CAN and will have to garnish her wages. You tell her that and then ask her when she can pay CASH for what she owes you. If she gives you a check you can almost bet it will bounce. Nice lady.

Is the blue and white cake in your photos the wedding cake, very nice, great cake, what a shame. as previous poster said, I would invoice her day before payday, day of payday, yep, I would do it in front of others also. ok I probably would not but I would tell her that an unpaid wedding item makes a bad start for a marriage, bad karma, again, sorry this occurred to you. Now you know to have wedding cakes paid in full weeks before the wedding. Unfortunately cakers might be considered a small vendor and left for last. keep us updated.

I'd go into where she works and talk really loud, be super friendly and upbeat and tell her that you must have missed her last week when she said she'd pay you then didn't show up. And that you'd be glad to wait until Friday to get the payment because it's so overdue already since she hadn't paid you when she said that she would, and you're sure that it was just an oversight since she had said she would pay you. Just ramble on and on about it in a voice that can be heard by all for miles around. It sounds like she's never going to pay you unless you take legal action, so you might as well embarrass her for it.

Anyone can take someone to small claims court for a debt owed.

If I agree to sell my couch to a neighbor for $200 and I allow them to take possession of the couch before payment, they still have the obligation to pay me. The verbal agreement is enforcable.

You made the cake and allowed her to take possession without payment. She still owes you the money.

If you're not legal in your state, you may have to deal with questions by the court about that. Some judges would see awarding you the judgement as condoning your illegal business, and you would lose. Others feel that such an issue is not part of the verbal contract because it was up to the client to know the status of your business and that a debt owed is a debt owed. You could also expose yourself to whatever penalties are in place in your state for operating an unlicensed business.

Rae

Blakes, that would mean that an unlicensed contractor could sue a homeowner for an unpaid bill. They cannot. The magistrates, or whoever in different states should know which professions require a specific license. A court cannot award for an illegal contract, and if a license is required, the contract and the transaction is illegal. I actually knew someone who tried to collect on an illegal drug deal gone bad. Same principal. This is different than selling a car, tv, etc., because a specific license is required. An unlicensed masseuse can't sue a client for an unpaid bill.

The court will be pro-customer and will not require that the customer knew the law.

But in every one of these situations, the client can sue the unlicensed business.

If the law in your area states that you cannot take compensation for a cake without a license, then the transaction is illegal and no court has the authority enforce an illegal transaction.

Sorry, but the burdens can be different in small claims courts. There's a lot more free play there. I basically already said that.

No, a judge isn't going to allow a drug dealer to collect on a deal gone bad, or a fence to collect when someone refuses to pay for stolen goods.
In each case, there is an obvious prior crime connected with the secondary transaction.

In the example of the cake, being unlicensed may be a lot of things, but it's generally not treated as a crime.

No one is entitled to unjust enrichment at the expense of another person, be that person licensed, or not.

Were the example of the unlicensed contractor true, then people should always look for unlicensed contractors and then never pay them

A person hiring a contractor should always ask about licensing and demand to see a copy of a license. Not a bad idea for those buying cakes, either.

If a person contracts with another person and payment is agreed upon, then when the payment is not received, a claim can be brought.

I live in a state where I don't need to be licensed or inspected in order to sell cakes. Believe you me, if someone EVER stiffed me, I'd be filing in small claims real quick.

Rae

Blakes, if you don't need a license, that is different. It comes into play when the license is required. I have never heard of a court upholding an illegal transaction. It has nothing to do with a crime. You cannot go to any court of law in any jurisdiction and get a judgement for an illegal transaction. They will just dismiss it. I'm sure that mistakes have been made. I had a construction company for over ten years. I know that the license must be in place in order to even file a mechanics lien. A disbarred attorney cannot accept compensation for legal advice. If he is not paid for advice, he cannot seek relief from the courts.


How about an unlicensed tattoo artist or an unlicensed babysitter? They are governed by the same health dept as we are. They can't go to court for unpaid bills. I know states vary and I am only talking about areas where the license is required.

Thank you all so very much for your feedback....some of these responses actually made me LOL!!!

Yes the white cake with the purple ribbon, quilting, dragees, and double hearts on top is the cake I am referring to It makes me so sad that someone would actually do something so unethical! I truly believe in Karma and I'm sure the bad ju ju will get her but it's the principle. I do have a business license and I rent a kitchen but I'm not sure that's all I need to be licensed in my state. I am going to take some of the suggestions that were given (i.e. invoice, and loud talking the situation in front of other co-workers) before I file against her in small claims court. Such a p.i.t.a! I wish I didn't have to go through all of this to get the money that I rightfully earned but YES this is a lesson learned...NO MORE MRS. NICE BAKER

Thanks again everyone...I'll let you know how it goes.

pastryqueen, I wasn't referring to you about the licensing and the court. It was really for anyone who may have found it useful.

In your situation, I would bank on her not knowing and threaten court. But you can offer a promissory note for a repayment plan. As long is it just had an amount and signed by both, it may be legal. You will be better off taking payments because obviously she is broke.

Glad to hear that some of the info was helpful.

Definitely start with approaching her---with a witness in tow--- and demanding payment. I'd even make up an official invoice and hand it to her. Let her tell you that she'll pay you on Fri. and then take the same witness on Fri. to pick up payment.

If she pays, great.

If she doesn't tell her that you'll be filing the papers for small claims.

Be condesendingly kind when telling her this--all sugar & syrup--about how it isn't personal--just a businss thing--and that you're sure she'll understand that you just really need to be paid for your time and materials, the same way she expects to receive her paycheck for doing her job every week.....and then walk away............and FILE.

Next time, no $$ before delivery--NO CAKE! No matter what sob story you're given. Payment on delivery--I do it, but others won't. If they don't hand you CASH--no checks, EVER--then you walk with the cake.

Rae

I thoroughly do not see the case of unjust enrichment in an illegal transaction. How can the court uphold an illegal transaction.
That is for the case where two people go to court. One pays the other's electric bill and the defendant's testomony is that she did it because she wanted to help, where the plaintiff claims a loan. I am no legal expert, but where I'm from and the surrounding states where I have worked, you cannot bring an illegal transaction to court. It's also in business law textbooks. My former marketing company had a majority of attorneys as clients and I had access to free advice for years while I also owned a construction company. Recourse by the court system has always been a priviledge of the licensed in a situation where the license is required.

I made one example of a crime. It has nothing to do with the point of small claims court.

OP, before you file and pay $100 to get $250 back, make sure that you have the priviledge to file. If you don't, you will be out $350.

I just googled unlicensed contractors to check my facts. In CA, an unlicensed contractor is not entitled to compensation in any case. Pages and pages are filled with supporting information.

Google searches went on about lack of a license in general. The consensus was yes, an unlicensed person may be entitled to compensation, but refer to the laws of your state, as the requirement of a license is dealt with differently and in most cases, the person is not entitled to compensation, or even to file.

Before I post, I check my answers.

Small claims judges/magistrates do not preside over crimes. This is a small claims civil offense. Crossing your fingers that the judge doesn't know the law is an odd way to do business.

Oh my Goodness......Legal advice aside, go home bake a chocolate cake with tons of ex lax in it and give it to her as a gift....The trips back and forth from the bathroom will atleast give you a little giggle until you get what you're owed.

Look at any 101 Business Law book and you will see that the courts cannot uphold an illegal transaction.

So you are saying that judges should make exceptions for cakes only, but if a co-worker fixes your air conditioning, he's out of luck? Selective justice sounds just as odd as crossing your fingers. Now if a co-worker doesn't pay for some yard landscaping, this only, out of the three, does not require a license and can be taken to court. Do you think the court should uphold a debt owed to an unlicensed nail artist? I want to see where these exceptions to illegal contracts are written into the law.

Why is it so hard to figure out that if you are going to do business illegally in the first place, don't look to the court for relief. Get the license or don't do it. That is my morality. Live by the law or move... you have a choice. But thankfully, not everyone decides to obey the laws that work for them and ignore the ones that don't. Laws are for the common good, not your good.

Again, I can see some good old boy magistrate that rules in the baker's favor, but it would be a mistake in any area that requires a license.

The legal situation in non-CFL states is more due to lack of action than anything else. At the federal level, the FDA says that if you sell food it has to be made in an inspected kitchen, and most states just decided to go with what the FDA says. No one at the state level went out of their way to make selling homemade cakes illegal.

If the cake was made by an unlicensed business and sold in violation of state law, and the customer didn't pay, the unlicensed baker may still be able to collect in small claims court. But it could be a Pyrrhic victory if the judge (or the defendant) finds out that the business is unlicensed, since they would be shut down by the health department (assuming no CFL of course). That was my main rationale for advocating thinking twice before getting the courts involved if you're not operating above board.

EDIT: Actually it appears scp1127 was correct, at least in CA (most states probably have similar laws):

http://www.avvo.com/legal-answers/can-we-sue-unlicensed-man-for-money-already-paid-f-397018.html

My two cents. Let it go. At this point, she knows she owes you money and she has no intention of paying you. If this is a co-worker and you approach her at work you are more than likely going to have more trouble than you bargained for. A trip to HR for creating a hostile work environment when she complains about you hasseling her at work for a personal matter is not worth the $250.

So sorry for your situation... it strikes a chord for me, because I make quite a few cakes for people I work with. I am hobbyist only, so I don't charge, but if any of the people that surround me took advantage of me, the money I had to spend and time I spent away from my children to do some favor for her... I tell you what, I would make it that she would be calling is sick every day for the rest of her employment. I know that this isn't the ethical, professional, or even "high road" method, but it certainly wouldn't be akward for me at work... only for her. I would ask her every day for her payment. I would show up at her desk. I would have sticky notes all over her computer. She literally would have to pay me or quit her job. THAT is how comfortable I would make it for her. I wouldn't be evil, and I wouldn't be threatening...smile and leave her daily sticky on her coffee mug.

Just don't put yourself in a situation where she could file some sort of harrasment suit against you. I personally, like others have said, would hand her a demand letter with a copy of the small claims court paperwork, filled out, and let her know that she needs to pay it full within 30 days and if she doesn't you will be filing these documents in court. If you think that she has no money then offer her a payment plan, instead of having to go to court. Good luck.