Picture this – you have been planning and dreaming of the perfect wedding for years. You and your partner have spent countless hours on phone calls, visiting venues, sampling cakes and menus, and stressing over guest lists and RSVPs. Final plans are made, deposits paid to secure services, and you and supportive family and friends are mentally preparing for the big day. Then suddenly, a global pandemic puts everything on hold until further notice. Likely, you will be wondering – can I get a refund from my already-paid deposits for the services?
One of most important issues you should think about is whether to postpone or cancel.
Look to your contracts to see if there are any terms regarding cancelation, cancelation fees, postponements, or how deposits are handled. There should be clearly stated procedures for what to do when an event requires an unexpected or emergency cancelation, and this usually includes something regarding the deposit.
Also look for a within your contracts. This type of provision relieves a party from their obligations in the contract under certain extreme circumstances such as “epidemic”, “pandemic”, or “public health crisis.” Even if those words are not specifically contained within your contract, the Pennsylvania Supreme Court in April defined the term “natural disaster” to include a pandemic. In the absence of a force majeure clause, you may still be able to negotiate a refund by arguing impossibility or frustration of purpose. In contract law, impossibility comes into play when a party, due to a change in circumstances – i.e. a pandemic, is excused from performing their duties under the contract because the change in circumstances has made their performance impossible.
Additionally, a party could be excused for their duties under a contract when a later and unforeseen event occurs and inhibits the buyer’s purpose for entering into the contract. For example, if you enter into a contract with a wedding vendor, and you must cancel your wedding due to health and safety concerns surrounding a pandemic, the purpose of your contract is no longer valid. This would frustrate the purpose of your contract and could be an argument for you to be excused of your duties under the contract.
Recently, Pennsylvania Attorney General Josh Shapiro has explained that businesses are required to honor event refund policies during an emergency related to COVID-19, and those that do not honor their refund/cancelation policies could be violating state consumer protection laws. The Attorney General has urged businesses to be flexible and understanding in these overwhelming and unprecedented times.
For those of you still in the planning stages, early communication regarding a possible need to cancel is always going to be more welcomed than reaching out suddenly during an emergency.
Try to be proactive by reading drafts of contracts before you sign, or negotiating terms up front. Every vendor’s contract may be different. Before signing anything, read and understand what the contract says about cancellations, rescheduling, grace periods, date-change fees and what is refundable. Make sure your contract includes a force majeure provision and a provision protecting you from extraordinary circumstances.
Additionally, if you have any questions, you should contact your legal counsel or a business attorney at KingSpry.