Deposit was Paid. Can Wedding Venue Ask for More Money if Bride Cancels?
What is required to officially cancel our wedding venue contract? What’s to be expected if we refuse to perform?: Recently we were forced to cancel our wedding due to financial hardship. Both my fiance and I lost our jobs and now we are trying to terminate our contract with the wedding venue; however, the wedding venue is charging us upwards of 6000 dollars (close to the cost of the entire wedding) as per the contracts specified cancellation fees. Every attempt at cancellation has resulted in them asking us to sign an ‘official cancellation’ document in which we agree to pay their ridiculous cancellation fee. Do we need to sign this document? Should we ‘refuse to perform’? Should we claim ‘impossibility of performance’ due to financial hardship…. if we refuse to perform what are the possible repercussions? Your advice is greatly appreciated…. we’ve both been tearing our hair out over this!!
Response (from Attorney Rob):
I’m sorry to hear that you have lost your jobs and have been forced to cancel your wedding. I hope that you are able to find employment soon and get back on your feet.
By cancelling your wedding, you have effectively ‘breached’ the written contract that you have with the Wedding Venue. The issue here will be the amount of damages (money) that the Wedding Venue is entitled to because of the breach. This amount will be dependent on a few factors. Also, please understand that I have not reviewed your contract, and much of the law revolves around specific facts, including the obligations outlined in that document.
First, both you and the Wedding Venue, at this point, are bound only to the obligations set forth in the original contract. You do NOT have to sign anything else, including a ‘official cancellation’ agreement, that would amend or change your obligations under the original contract, unless doing so would ‘help’ your position. For example, you both agree that you will pay a certain amount in exchange to not sue one another, or not disparage the business online. In other words, you are only really ‘legally’ obligated to do what you originally intended, i.e., pay X amount to use the Wedding Venue for X time.
Non-Refundable Deposits in Wedding Contracts are Liquidated Damages Clauses.
What happens if there was a provision in your contract that says something like ‘Deposit is Non-Refundable’ or something similar? Generally, this means that in the event of cancellation, these are the ONLY damages that the Wedding Venue would be entitled to. The law refers to these as liquidated damages. In order to be enforceable, the law will look to whether such an amount is reasonable given the total amount of the contract, and how soon after the contract was signed did you cancel. In short, a liquidated damages clause (non-refundable portion) cannot be crazy high or act as a punishment. If the contract requests a good portion of the monies due up front that are non-refundable, then there is a possibility that this would be unenforceable.
Based on the wording of your question, it appears that there is no ‘non-refundable’ portion, or the Wedding Venue is trying to get you to pay more over and above that initial non-refundable portion. Generally, the non-breaching party is bound by the non-refundable portion ONLY, or in short, they can’t protect themselves with a non-refundable deposit AND attempt to sue for more.
Let’s say there is no non-refundable deposit portion. While you still may be considered in breach for cancelling, the Wedding Venue must take affirmative steps to lessen its losses. The law calls this, “mitigating damages.” Here, the Wedding Venue MUST make reasonable attempts to re-book the date. If it does not, and you can prove it in court, the Judge may lower the damages amount or refuse to find that the Wedding Venue was in fact damaged. Depending on how far out the wedding is, it may be impossible to rebook. In this case, you would be responsible for the contract value minus the Wedding Venue’s expenses (‘expectation damages’). These are common breach of contract damages.
In regards to ‘impossibility of performance,’ this will NOT be a successful contract defense for you. These defenses are reserved for things outside the party’s control, like death of a party, contract made illegal by law, etc.
I would highly advise that you have an attorney review the contract, and the ‘official cancellation’ document that the Wedding Venue wants you to sign. You have the right to tell your story online truthfully (i.e., don’t defame the business), so when you agree NOT to do this, it is of high value to the wedding business. This should be kept in mind when negotiating a settlement.
Moral of the Story: Wedding Venue Operators- There is a fine line between having a non-refundable installment payment plan (or deposit) and extorting money out of clients.