Covid-19: What are the legal implications for cancelled weddings and civil ceremonies?
Do you have a contract for your wedding (or any other similar celebration)?
Are you the customer or the business offering the service?
Does the contract really cater to what has happened in 2020?
I will have used the term 'wedding' in this article but the principles would equally apply to other similar types of celebration.
The wedding industry has faced a torrid 2020 as a result of the lock-downs and general Covid-19 restrictions. Many wedding venues and hospitality services are facing bankruptcy, while expectant couples have had their dreams put on hold or, worse still, lost thousands of pounds. As a result of this terrible situation, the Competition and Markets Authority (CMA) has issued a statement which attempts to bring clarity to the situation.
It has openly warned wedding venues against unfair treatment of couples whose weddings have been affected. The statement also confirms what couples or customers might reasonably expect.
Summary of the Competition and Market Authorities Statement
If the planned wedding simply cannot proceed due to lockdown restrictions, the CMA says the contract is incapable of being performed and therefore has come to an end. This means the contract is ‘frustrated’ in legal terms.
When a contract becomes ‘frustrated’ the monies already paid should be refunded (including any non-refundable deposits). The customers should not be asked for further payments.
If the event was booked during severe restrictions short of full lockdown, the CMA says it’s not unreasonable for the engaged couple to be of the opinion that it would not proceed. This situation also would be considered ‘frustration’ of contract.
If the wedding can go ahead but not as planned the CMA’s guidance states that, if there are ‘significant changes’ to the original agreement, a refund MAY be available as ‘frustration’ MAY have happened – it depends on the severity.
If the changes are minor, the CMA advises a proportionate refund should be provided. However, it depends on the severity. For example, has the catering been cancelled? – entertainment? – fewer guests allowed in?
The situation is of course clearer in respect of cancelled weddings as opposed to varied weddings. No doubt there will be a number of disputes in the coming weeks heading to Court.
Can Costs to the Business be deducted from the Customers Refund?
Maybe – maybe not, as it depends on the category of costs...
Permitted Costs Deductions
These are services or products that have already been provided to the couple, e.g., specially made, or purchased goods that could be used at a rearranged wedding date. The business would also be allowed to deduct costs incurred in the wedding preparation (for example, the cost of staff planning the wedding, or the costs of perishable goods such as food or flowers).
However, these deductible costs must have been incurred before the wedding was stopped from happening and must be directly relevant to the wedding in question and not be generic. The CMA anticipates a court to consider dividing costs between the business and the couple, as neither is at fault for the wedding not being able to take place. If the contract was for venue hire only, the CMA expects to see a full refund.
Non-Permitted Costs Deductions
These include costs for anything that produces ‘ongoing and reusable benefits’ for the business (such as general refurbishments or maintenance, brochure printing, etc). Similarly, the CMA would not expect to see fixed costs deducted, namely costs the business would have incurred regardless of the cancelled wedding, e.g., Utility bills, rent, rates, and wage bills. Furthermore – if the business can claim relief from government funding, the loss should not be claimed against the couple.
Rearranging to Another Date
If you are able to change to an alternative date AND the service provided is to be the same, there shouldn’t be any additional charges at all.
Unfair Contract Terms
Both parties should be aware of the risk of terms being included in the contract that may be considered unfair and therefore unenforceable e.g., a term providing for no refunds at all would be highly questionable and likely to be considered unfair by a Court.
Similarly, there may be a term permitting the business to substitute the venue or a smaller event. The business should be aware of the vulnerability of such clauses. Furthermore, if the contract is to be varied, sufficient advance notice should be provided to the couple, preferably with the option to pull out, and a reduction in price to match any reduction in what is offered.
Any such cancellation penalty amount should, according to the CMA, be proportionate and reasonable and only be payable if the wedding can go ahead but the couple still wishes to cancel.
Only costs incurred as a result of the cancellation can be claimed. Any clauses requiring full payment etc are likely to be unenforceable. Any cancellation charge should ideally be transparent and broken down.
How Our Bespoke Service Can Help Protect Businesses And Customers
Whether you are the business or a couple hoping to get married, Everyday Legal is here to help. We can draw up a unique agreement for your wedding or other events (we cater to both consumers or business owners that need assurance in writing). Equally, if you already have a contract or agreement and are concerned about its terms, we can also offer a review and proofread service. Contact us here to find out how we can help.
It is always best to be open, balanced, and transparent in such important matters so each party knows exactly where they stand in the event plans are affected – ultimately it saves money and prevents heartache!
11th December 2020
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