“We didn’t secure our wedding venue on the grounds that were outlined on the contract… must we still pay a cancellation fee?: Several months back, my fiance and I were planning our wedding. We found the perfect venue but were unable to pay the full initial deposit. The venue agreed over email to let us make payments as we could (with no specifics dates or amounts outlined): however, economic hardship soon struck and we were forced to cancel the wedding altogether. On the contract it specifies that, “to secure your space on a definite basis,” an initial, non-refundable deposit of 1,250 is required, however we only payed $400. Since we canceled 100 days before the wedding the venue’s assertion is that we owe 50% of the cost ($3600!!) as outlined in our contract. However, since we never paid the full deposit required in the contract can they demand this since we never had secured the space under their terms?”
Response (from Attorney Rob):
I’m sorry to hear that your wedding has been cancelled due to economic hardship, and also sorry about your troubles with the Wedding Venue.
Borrowing a phrase from my esteemed colleague, it is my view that the Wedding Venue’s request for fifty percent of the Contract Value is ‘Bull Pucky.’ I think that in the event that the Wedding Venue files suit, you have a strong argument that you have no further obligations based on amendment of the contract by the parties.
A written contract may be amended (i.e. the explicit obligations set forth in the writing are changed) either through a subsequent written agreement or through course of conduct. Here, you have a written contract with the Wedding Venue that requires a Non-Refundable Deposit of $1,250.00. Based on the facts that you have presented, it appears that the Wedding Venue, through subsequent writings (the emails), has agreed either to (a) accept the $1250 Non-Refundable Deposit in installments, starting with a payment of $400 or (b) accept $400 as the full Non-Refundable Deposit. Under (a), you may still be on the hook for $850, and under (b), you would have no further obligation. It would be necessary to actually see the emails in order to make a more definitive determination, but this seems to be the likely result.
Non-Refundable Deposits are treated by the law as “Liquidated Damages,” meaning that, in the event of a cancellation (breach), the parties have agreed that the Deposit value represents the full recovery amount (Learn more about Non-Refundable Deposits HERE). In your case, this amount will be either $1250 ($800 remaining) or $400 ($0 remaining). I think that the Wedding Venue will be hard pressed to show that they are entitled to $3600, whether or not the Contract was amended.
Further, in the event of a breach, the non-breaching party is obligated to reduce their damages. Here, the Wedding Venue must take reasonable steps to secure another event on that date. Any monies made from this new event would be subtracted from the damages that they could lawfully seek from you. Unfortunately, you have only given the venue 100 days notice. To the general public, this may seem like a long time, but in the wedding industry, the selection of venue is usually made over 3 months out. Further, what reasonable steps are is difficult to ascertain.
At the end of the day, I do not think that the Wedding Venue, based on their amendments to the Contract, have a real legal footing to come along and demand $3600. However, this is not to say that you can’t be threatened with a lawsuit or actually sued. This amount, in the grand scheme of things, may not be worth their time pursuing. Further, they will run the risk of being that company that sues their clients.
Moral of the Story: This Wedding Venue’s heart was in the right place, but failed to protect themselves by properly amending the Contract to reflect what the couple’s obligations would be. Wedding Vendors, particularly Venue Operators, should always document changes to the contract via explicit writings (emails, letters, etc).