We're unable to host our upcoming wedding ceremony because our state has a stay-at-home order. What's the first thing we should do?
Many large companies are issuing automatic refunds, but vendors that provide services for weddings, bar mitzvahs, and other private events tend to be smaller operations. This means they're also trying to figure out what to do, so you'll want to reach out to them personally to discuss your options. The current crisis is putting event planners and vendors in a very difficult spot, as they watch future revenue evaporate, so they may be willing to work something out that's beneficial for both parties.
But before you reach out, be sure to read through your contracts and any other terms put into writing (including email correspondence) regarding cancellations, cancellation fees, postponements, and deposits. If you are unsure, a lawyer can also review your contracts and help you determine your rights and obligations.
What should I look for in the contract or vendor agreement?
Most service contracts have (or should have) clearly stated procedures for what happens when an event is cancelled, including what happens to the deposit. However, keep in mind that the cancellation policy is most often broadly written to cover all cancellations and may not account for unforeseen public crises such as the coronavirus pandemic.
If your contract has a force majeure clause, which frees both parties of their contractual obligations due to an "act of God," you may be able to use a Force Majeure Notice to invoke the clause and renegotiate or terminate your agreement. However, the clause must include language that specifically suggests the current crisis, such as "contagion," "epidemic," or "public health crisis."
In the absence of a force majeure clause, you may still have leverage if you're able to invoke a pair of common law defenses to contractual obligations—the doctrines of impossibility and frustration of purpose. These are similar to force majeure but narrowly construed by most courts; and since they're not explicitly written into the contract, they require a more robust effort on your behalf.
If you're unable to work out an amicable agreement, a lawyer can answer your questions and help you determine your legal options.
My state doesn't have a stay-at-home order. Does that hurt my effort to get a refund on deposits?
If your state or local government has instituted a stay-at-home order, then it may provide an affirmative defense to your contractual obligations related to a gathering or event. In other words, it's legally impossible for you and the other party to fulfill your obligations.
Even if your state doesn't have a stay-at-home order, however, the U.S. Centers for Disease Control (CDC) is urging Americans to cancel large gatherings for the foreseeable future. This, along with the World Health Organization's March 11 declaration of a global pandemic, may provide the basis for a legitimate legal defense.
Should I postpone my event?
Depending on the nature of the event, you may still want to hold it at a later date. The problem is, no one knows for sure when it will be safe for people to congregate for social events. So what should you do?
You may be able to find common ground with your vendors—who, in most cases, are desperately trying to maintain positive working relationships—by postponing the event. Even if you don't know whether a given future date will work (i.e., how this pandemic will play out and for how long), it could be considered a "placeholder" that could be pushed back again if necessary. In this scenario, you'll be able to keep your plans (just at a later date) and the vendor will be able to keep their deposit.
However, it may prove to be difficult when multiple vendors are involved, as is the case with weddings. Pushing it back by as much as a year may help ensure you're able to align all of your vendors to that future date.
What if I simply cancel the event instead?
If you decide to cancel the event altogether, then you'll most likely be asking the vendors about getting your deposit back. They may agree to your request, or do this voluntarily, given the gravity of the situation. Letting them know that you plan on holding the event at a future date (even if you're not sure when), and still want to use them as a vendor, may help.
It's important to know your contractual rights and legal options, but it's just as important to approach your vendors with humility and understanding. If you come at them with legal threats or a refusal to compromise, they'll be less willing to work something out that's beneficial for both parties.
Also, you should check your contract's cancellation policy in detail. Since it's difficult for vendors to schedule services for dates that are just a few weeks out, as opposed to months in advance, they often charge higher cancellation fees (aside from the deposit) the closer it is to the event. There may also be restrictions on deposit refunds the closer the cancellation is to the event date. In either case, it may be to your benefit to postpone the event instead.
Know your legal rights
The COVID-19 pandemic, and the social distancing requirements intended to mitigate the virus' spread, are wreaking havoc on events and gatherings of all sizes. You'll be able to host your big event at some point in the future, but in the meantime—especially if you're concerned about getting your vendor deposits back or avoiding cancellation fees—it's important to understand your rights and obligations. Ask a lawyer if you have additional questions or concerns.
For free legal documents and legal advice related to COVID-19, visit the Coronavirus Legal Center.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.