Getting Your Deposit Back for a Cancelled Event: Your Legal Rights
As the saying goes: the best-laid plans often go awry. When you are planning a wedding, conference, or other major event entailing hundreds — sometimes thousands — of attendees and many thousands of dollars in vendor and venue fees, then the sudden need to cancel the event can put you in a dire situation. You are suddenly left not only reeling from the change of plans but scrambling to get deposits returned and obligations voided.
Your ability to terminate a contract, reclaim your deposit, and avoid a common breach of contract penalties depends entirely on the contract’s language. Hiring a contract litigation attorney on Long Island can help you interpret your contract and analyze the provisions that may allow you to retain your right to recover your deposit or generally avoid negative consequences of your cancellation. Call 1-833-TONALAW or contact us online to schedule a free, no-obligation case review where we will discuss your legal rights.
Your rights to reclaim your deposit may apply to a wide range of possible event types, including:
- Trade shows
- Promotional or release events
- Awards shows
- Private performances
The main legal reasons you may be able to get your deposit back after an event cancellation include a force majeure clause, the impossibility doctrine, and the frustration of purpose doctrine.
Looking for information specific to COVID-19 and coronavirus-related cancellations? Visit our COVID-19 event cancellation page.
Force Majeure Clauses
A force majeure clause is a specific provision found within some contracts that can give one or all parties the opportunity to “back out” and not perform the contract given specific, unpredictable events.
Commonly listed events include:
- Natural disasters
- Government acts
Importantly, for a force majeure clause to be used to escape obligations related to a contract, the force in question must have been unforeseeable, and the contract itself must be fairly specific in order for the court to properly interpret it. Many contracts include language stating the above-named occurrences along with a phrase that goes something like: “or similar events…” In these cases, it is up to the courts to interpret what events can be deemed similar or if that language is too vague to be applied in the specific case at hand.
An “unforeseeable” event is one that is both uncommon and could not have reasonably been predicted. An afternoon shower is a common occurrence, for example, but a sudden flash flood may not be.
Importantly, a force majeure clause may exclude specific types of events, including public health events like a pandemic. In these cases, the contract’s named parties may have to look to an alternative type of force to justify their reasoning for why the force majeure clause should apply, such as an act of government specifically banning the type of gathering that was planned.
If a force majeure clause may not be used to remove obligations under a contract, then the party in question may attempt to assert the impossibility doctrine.
This doctrine, put simply, asserts that the contract was completely impossible to perform given the circumstances.
While that may sound like a free ticket out of a contract, in reality, the impossibility doctrine is difficult to apply except in very specific situations. For one thing, the circumstances must make it “objectively impossible” for the contract to be performed, so if the situation is merely difficult or not ideal, the court will likely not accept the argument. Further, both parties must exhaust every alternative option before arriving at the conclusion that the contract cannot physically be enacted as intended.
Frustration of Purpose
Given the difficulty in using the common law doctrine of impossibility, contractual parties may instead consider taking action under another common law concept: frustration of purpose. This concept says that while the contract could, in theory, be performed, the original purpose behind the contract cannot be satisfied given the circumstances.
Frustration of purpose allows for more interpretation of the circumstances, and the parties involved no longer have to prove that they took every conceivable action before attempting to nullify the contract. Instead, they can merely state that it no longer “makes sense” for the contracted event to continue.
As an example, a concert venue that was booked for the purposes of a live performance may still be available for a performance to occur even if the specific band booked can no longer perform. However, if the intent of the concert was for the specific band to perform — as opposed to just any band — then it may be possible to assert that there is a frustration of purpose, potentially excusing non-performance of the contract.
Note that anyone arguing under the frustration of purpose doctrine has more legal grounds if the specific intended purpose of the event venue booking or vendor contract was named in the contract. If the purpose of the contract was vague, then the party may be obligated to still fulfill the contract or face penalties for non-performance.
What to Do If You Need to Cancel an Event and Want Your Deposit Back or Want to Avoid Penalties
- Review your contract for specific language related to event cancellations and circumstances beyond anyone’s control, i.e. a force majeure clause.
- Reach out to the vendor, venue, or service provider in question. Notify them of your circumstances, and politely request an exception to the contract language given what has occurred. Be specific as to your reasons for non-performance, and refer to the language of the contract if applicable.
- Consider bargaining in order to satisfy some measures of the contract rather than all of it. For instance, a caterer may agree to return some or all of a deposit if you agree to book them for a smaller event later on.
- Should the person you contact refuse your proposed agreement, speak to a higher authority to see if they can release all parties from the contract’s provisions. For example, a catering company may be owned by a hospitality company or a larger holding company, allowing you to supersede the caterer’s authority.
- Do not directly threaten legal action until you have spoken with a contract law attorney about your legal rights and available options. Informing the other party of adversarial litigation could severely limit your options while giving them the opportunity to mount their own claim or lawsuit.
- After reviewing your contract with an attorney, try to negotiate a more favorable agreement or settlement to avoid trial litigation or other time-consuming, expensive action.
- If no settlement can be reached, seek legal intervention via the courts through an experienced attorney.
Getting Your Deposit Back After an Event Cancellation on Long Island Is Not Always Easy, But the Contract May Be on Your Side
When circumstances outside anyone’s control forces an event cancellation, the best approach is to be diligent about researching your contract terms and your available rights. Know what the contract says before you approach the party with a request for a deposit return or similar beneficial actions. Do not provoke the party or threaten legal action before speaking to a lawyer; if you do intend to sue or seek a settlement, let your actual legal actions do the talking.
At TonaLaw, we understand the frustration, anxiety, and heartbreak that can come from a sudden event cancellation. Whether an unexpected pandemic wreaks havoc on our best-laid plans or a wedding gets canceled for whatever reason, the consequences can involve more than just missing out on a good time.
We promise to leverage our experience in litigating contracts and seeking optimal outcomes for our clients. You receive the benefit of our decades of experience dealing with all manner of individuals, businesses, and legal professionals on Long Island.
Let us help you determine your legal options and the best strategies available for avoiding penalties after an unexpected event cancellation. Reach out to us at any time by calling 1-833-TONALAW or by contacting us online, and we can schedule you for a free, no-risk case review.