Reservations: Overview, definition, and example
What are reservations?
Reservations refer to the process of securing a product, service, or space in advance for future use. This term is commonly used in contracts related to hospitality, travel, event planning, and service-based industries. A reservation typically involves agreeing to specific terms, such as payment, cancellation policies, and usage conditions.
For example, a customer booking a hotel room for a specific date is making a reservation. The hotel guarantees the room’s availability, and the customer agrees to the booking terms, including cancellation fees if they change their plans.
Why are reservations important?
Reservations provide certainty for both businesses and customers by ensuring that a service or product will be available when needed. They help businesses manage capacity, plan resources, and secure revenue in advance. For customers, reservations offer assurance that they will receive the service or product as expected.
Without clear reservation terms, disputes can arise over cancellations, refunds, or changes. A well-defined reservation clause in a contract helps set expectations, outlining policies on modifications, payments, and no-shows.
Understanding reservations through an example
Imagine a restaurant allows customers to book tables in advance. The reservation policy states that if a customer is more than 15 minutes late, the table may be given to another guest. This ensures efficient table management while informing customers of their responsibilities.
In another case, a car rental company allows customers to reserve vehicles online. Their contract states that reservations are held for up to two hours past the scheduled pickup time. If the customer does not arrive within that window, the reservation is canceled, and the vehicle is made available to other renters.
An example of a reservations clause
Here’s how a reservation clause might appear in a contract:
"Reservations made through [Company Name] must be confirmed with a valid payment method. Cancellations or modifications are subject to the terms outlined at the time of booking. Failure to arrive at the reserved time may result in forfeiture of the reservation and applicable fees."
Conclusion
Reservations help businesses and customers plan ahead by securing services or products for future use. A well-defined reservation policy sets clear expectations on availability, cancellations, and responsibilities, reducing the risk of disputes. Businesses benefit from better resource management, while customers gain confidence that their booking is honored under agreed-upon terms.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.