Enforcing Loss of Income on Cancelled Wedding

<p>Hello All,<br>

I was wondering if anyone of you has a 'Loss of Income' clause in their contract? I.E: If the wedding is cancelled at a specified time frame close to the wedding date, then the couple is liable to pay a percentage amount or total amount of the outstanding balance as a concession for loss of income. (Obviously because that date is unlikely to get rebooked).<br>

Has anyone ever had to enforce this? How did you go about it and were there any repercussions?<br>

Thank you in advance. </p>

<p>It's never happened to me but I'm in the UK and the law here is crystal clear: providing the conditions are clearly stated on a receipt and on any advertising material, a non-refundable deposit is a valid contractual agreement, subject to the goods or service being of satisfactory merchantable quality.</p>

<p>In the case of a cancellation, the latter condition does not, of course, apply.</p>

<p>In essence you are describing the deposit (and why you have one) I don't have such a specific clause in my contract, nor would I try to enforce it (above and beyond the deposit). Of course I make the deposit a percentage of the total. If the client cancels, or defaults on the final payment (breaching the contract), the deposit is liquidated damages, and not refundable. I consider this akin to what you are proposing, without all the messiness of trying to collect additional amounts from a client who already doesn't want to pay you.</p>

<p>Since, here in the US at least, you can't simply force somebody to pay you moneys (and would you really want to try?), they have to agree, and if they don't, your only real recourse is a civil suit. Given the time and effort (and potential damage to your reputation), I imagine the prospect has quickly diminishing returns. </p>

 

<p>I have a clause that clearly states deposits are non-refundable under certain conditions. The situation described would fall under those conditions. The deposit should be significant enough to make sure you're not totally screwed. Say, 20% due at booking to hold the date, 50% due by one month before the date. Just some numbers to illustrate.</p>

<p>This is why some require complete payment up front, with a 50% refund (e.g.) in case of last minute cancellation.</p>

<p>Thank you all for your responses. I may not have made myself completely clear in my original post; When a client books they pay a Retainer to secure the date. This Retainer is usually forfeit if a cancellation occurs. What I mean is claiming loss of income on the outstanding balance of the invoice after the retainer.<br>

This clause seems to be used by many photographers, probably the most high profile of these is Damien Lovegrove. The contract he uses, and encourages many to do the same can be found here:<br>

<a href="http://www.prophotonut.com/wp-content/uploads/2008/12/choice_4_contract.pdf">http://www.prophotonut.com/wp-content/uploads/2008/12/choice_4_contract.pdf</a><br>

If you look under the Cancellation clause, this hopefully will give you a better understanding of what I mean.<br>

Would be interested in your thoughts. </p>

<p>Having posted the contract sample, we now know, with less research to perform, what nation's law applies.</p>

<p>I understand your question. I work in AUS., the laws are similar to UK<br /><br />I have never used a "Loss of Income" clause during the years I was involved with three Studios, I or my Company owned. <br />That style of contractual clause is 'Customer Negative' IMO.</p>

<p>For Weddings, we moved through a variance of Deposit and Payment policies - all fundamentally predicated on a Deposit at Time of Booking and Final Payment completed, prior to the date.<br />If loss of income due to cancellation is a substantial concern to the business, I think it would be better, to increase the deposit amount (i.e. not refundable), rather than to have a "Loss of Income" clause.</p>

<p>Also, although I am not an Actuary, the likelihood of someone opting-out of a Wedding close to time (and forfeiting the Deposit) is rare (well it was for us - I can recall only two and one was because of death and the other severe illness) - so the 'value' in monetary terms, of a "Loss of Income" clause, seems to me, to be far, far less, than <em>the number of PROSPECTS it might potentially put off-side.</em></p>

<p>WW</p>

<p>Having now read the 'loss of income' terminology in his contract, I'm not certain that it would be enforceable, at least in a US court. I could be wrong of course (I'm not a lawyer), but it presents a host of difficulties, from communication times to collections to culpability -- perhaps with better wording? . I understand why you'd want to include it (free money) but as WW says, it's as likely to turn off as many or more folks than you'd ever see the purely monetary gain from as a result.</p>

<p>As others have already pointed out, it's a really good way to make your (potential) customers angry. And angry people tend to tell their friends, who in turn tell their friends, etc. A lot of business comes through word of mouth, and this is not a good way of getting more business. Maybe famous photographers with rich clients can get away with doing this, but most photographers don't fit in that category.</p>

<p>Marcus -<br>

In a US court it would be a mitigated or mitigation of damages. The court (if it got that far) would look at it and see if the photographer was "damaged" by the event being cancelled. </p>

<p>I'm assuming - because I've never had to go to court over this - the court would look at the amount, length of notice given, and the events / effort the photographer put into finding a replacement event. </p>

<p>My contract does specify that if I am able to book another equal or better event, the client will get their retainer back. However, if I am not able to book equal or better, the retainer is equal to the damages that I have suffered. </p>

<p>I don't have a penalty beyond the retainer in my contract. </p>

<p>Dave</p>

 

<p>40% non-refundable on signing agreement<br>

40% on the day<br>

20% on presentation of images.</p>

<p>IMHO, the sample contract is kind of goofy in regard to the loss of income with the schedule. The general idea is fine, but usually when a detailed schedule such as the one shown is included, it would be applied to a larger amount pre-paid such as 100% of the fee so that the photographer, <strong>refunds back</strong> according to the schedule. Attempting to collect relatively small "extra" amounts is silly unless you have a lot of cooperative clients that are scared of you. I think the idea of clarifying/defining the deposit amounts retained as "loss of income" is probably a good idea so that it is understood that the photographer has given up potential business to hold the date. </p>