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Earlier this month, Walmart Inc. ended its grocery delivery partnership with a third-party courier firm. About a month earlier, the retail giant announced it had added four new companies to help with its online grocery delivery option.

A Walmart representative said in an email that its previous arrangement with Deliv was part of a pilot program that ultimately revealed that Deliv's platform was not the best fit for Walmart's program. But the issue highlights the fact that the convenience afforded by home grocery and restaurant delivery services is often belied by a number of tricky legal matters that in-house lawyers must navigate.

“It's a hard business to figure out, so it makes sense that [some businesses] try and ultimately fail,” said Anna Tauzin Rice, vice president for marketing and innovation at the Texas Restaurant Association, the leading business group for the state's $52.4 billion food service industry. “Consumers nowadays undervalue what it takes to get things done.”

Corporate Counsel spoke with experts about what issues food and beverage companies should consider when weighing whether to partner with a vendor for delivery services or offer the convenience themselves.

“Unless you're a big fish in a small pond, you're not going to have a lot of control over the partnership agreements” with third parties, said Suzanne Singer, a partner at Rumberger Kirk & Caldwell, adding that with in-house delivery a company is able to maintain more control over the process, but it is one that requires significant knowledge and infrastructure to support.

In fact, Rice added, some restaurant delivery services offer delivery without the business' permission and in the absence of any agreement, a practice that has given rise to some litigation.

At the very least, Singer said, any partnership agreement should provide a time frame for delivery so that food safety issues are adequately addressed. Using trackers to monitor and ensure proper delivery times and supply chains, as well as requiring vendors to transport the food in insulated bags, can be helpful in this regard, she added.

In addition, Singer said, companies, to the extent they can, should ensure that the agreement has a proper security system in place to protect consumer information against not only data breaches but the unauthorized distribution to other entities as well.

Even in the absence of a formal partnership agreement, there are several matters that restaurateurs should discuss with potential delivery vendors before agreeing to a delivery arrangement, Rice said. These include, she added, an understanding of: the delivery radius so that wait times are understood and appropriate; pricing for to-go packaging in some cases; and the prices of actual menu items in order to cover the third-party delivery costs.

“The [businesses] want to stay friendly to consumers, so they want to keep their prices as low as possible, but it takes a lot of money to make this happen,” Rice said.

In addition, the food companies also will want to make sure that the third-party vendors are sufficiently insured for auto liability, Singer said. This due diligence, she added, extends to performing background checks on delivery drivers.

“If you have an employee that's working for Grubhub and commits an intentional tort and there's no insurance, [a plaintiff] is going to go after the deep pockets,” she said. “And lawyers can be very creative.”

Along those same lines, Singer said, companies, in an effort to minimize brand and reputational damage, will want to make clear to the public that they have partnered with a third-party delivery service and it is not the company itself performing the service.

“You want to distance yourself and let them know that this is not you,” she said.