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How should I calculate my non-refundable deposit?

So let’s talk about a common wedding industry pitfall: Not gettin’ that paper upfront.

Did someone say liquidated? Put some Nescafe in it, then.

Did someone say liquidated? Put some Nescafe in it, then.

The legal term for taking a payment that is non-refundable in the event of a cancellation is called a Liquidated Damages Clause, or LDC for short. So, with an LDC, you and the client are agreeing up front that, if the event is cancelled, your damages, or the harm you will be caused, will be exactly equal to the amount of money that you have accepted from the client up until that point. Read more about the law behind Liquidate Damages Clauses here.

A big pitfall is a weak LDC. That is to say, it does not adequately protect you from the risk of cancellation. I have worked with clients where they take only one up front payment, and it was the same amount, regardless of whether the contract was $1000 or $20000. That is an example of a weak LDC. Why? Because your likely not going to see any more money out of the client, so the less money you take in during the duration of the contract, the less money you will have should the event be cancelled. Need more convincing about this? Watch me talk about it here and here.

So what is the optimal way to handle payment? Calculate multiple installments based on your OVERALL RISK throughout the duration of the contract.

Let’s break that down. First, what do I mean installments? Installments mean taking money from the client at 3 or 4 different times during the duration of the contract.  There is no law that says you have to take money on the day of the signing and the day of the event. Obviously, the more times you take money from the client, the more you will have if it the event is cancelled. Watch me talk about this topic a little more here.

Second, how do we calculate those installments? The amount per installment should be based on your OVERALL RISK that you have at ANY GIVEN POINT during the DURATION OF THE CONTRACT. This means looking at the AMOUNT OF TIME AND MONEY you have in the contract, while KEEPING IN MIND your ability to REBOOK the date.

Look at it this way, ONE DAY AFTER YOU SIGN the contract, you have very little risk. You theoretically have spent no time or money on the client. The likelihood of you getting another job for that date is probably pretty good. Or at least as good as the one you just signed up, right? But, the DAY BEFORE THE EVENT you have the MOST risk. You’ve got nearly all of your time invested, and the chances of you booking another event for the next day is about the same as me regrowing my hair. The more and more risk you have, the more money you should be taking in. Figure out where your risk is, and spread the payments out accordingly.

What happens if the principal photographer has exclusive rights to shoot the wedding?

You gotta know when to hold em, know when to fold em....

You gotta know when to hold em, know when to fold em….

Often, the principal photographer bargains with the client for the exclusive right to photograph the wedding. There are lots of reasons for this. Exclusivity decreases competition, increases product value, and it certainly makes for a smoother work environment.

So what happens if you get permission to photograph the wedding, but the principal photographer comes up and says “I have the exclusivity..” (I go in depth on the legal aspects of this topic here).

Will you have to quit, or can you both take pics? THERE IS NO BRIGHT LINE RULE. Each case will depend on the facts, and again, on the wording of each of your contracts. One trial judge might say one thing. Another might say another. Who knows? But I can tell you that, 100% of the time, if you follow that fight to its legal conclusion, you know who the defendant would be? The Client. The client is in breach of two separate contracts. The one made to the principal photographer and the one made to the other vendor. So let’s avoid that, shall we?

If you are a principal photographer, communicating with the client is the key to preventing this problem. At the initial meeting, I mean like, right after “Hi, my name is,” you must discuss your exclusivity clause. Does it apply to other vendors, does it apply to vendors who use their iphone to take a couple quick shots, or just when they hire professional set photographers? How about guests? Inform the client, in person and through the contract,  “this type of photography is not acceptable, and here is why…” List the consequences. Here will be the ramifications if this is breached- “I’m bouncing,” or something like that. If you do this, if you educate the client, then the client will know what to look for when reviewing other vendors’ contracts later. And, even better, they will know how to handle it at the event.

For all the Non-Principal Photographer Vendors- Don’t get me wrong, dudes. You guys can certainly bargain for the right to photograph weddings. Have the client go back and confirm that by providing you authorization to take pictures at the event, they are not stepping on someone else’s toes. If you take affirmative steps to cover yourself, you should be OK.