I am sooo freaking excited about today’s blog!
Shea and I are often asked for legal advice regarding contracts, business issues, and more as we’re working with coaching clients. While we can give general advice based on our past experiences, we’re not lawyers. And for that reason we’ve teamed up with Rob Schenk of Wedding Industry Law to bring you some real life serious advice for your wedding business.
In preparation for this blog we asked all of our Facebook followers what they would ask an attorney if they could and Rob totally delivered with these great answers.
But first – you can’t talk to an attorney without the fine print so let’s just get it out of the way right up front.
Rob would like you to know that:
“Attorney Rob Schenk provides the following information for informational and entertainment purposes only. This information is not intended to be legal advice. Wedding Business Professionals are recommended to seek the advice of local counsel for advice to their specific legal issues.”
Now for part one (of who knows how many) of our legal mumbo jumbo blog, Rob will be answering some of your contract related questions:
Question – If I have a contract that says “deposit non-refundable”, under what terms can a client come back and try to get it back? Example – if they cancel their wedding and want their deposit back.
Answer– In legal terms, a ‘non-refundable deposit’ is actually a ‘Liquidated Damages Clause.’ This means that the parties are agreeing to a specified amount of damages that are owed by the breaching party (Bride) in the event of a specific type of breach (cancelling the wedding).
Liquidated Damages Clauses are generally enforceable, so long as the amount represents reasonable compensation to the vendor for the loss, rather than punishment for breach (i.e., incentiving the Bride NOT to breach).
For example, in some states, collecting the total amount of the contract, up front, as ‘non-refundable’ is viewed as punishment and non-enforceable. A wedding business professional should use explicit language so that the Bride knows exactly under what conditions a payment may be refundable (whether it is called installment, retainer, deposit, etc), in what amount, and when.
A more thorough explanation of the ‘deposit non-refundable’ issue can be found on one of Rob’s previous blogs, “The Truth About Non-Refundable Deposits”.
Question – Retainer vs. Deposit–which is better to use?
Answer – There is a lot of misunderstanding about these terms. It’s best to consult with an attorney in your state regarding the law surrounding non-refundable deposits, as this issue can be very state specific.
In general, the word used to describe the payment (deposit/retainer/payment/installments/highfives) is not as important as the explanation of what happens to it in the event of cancellation (see above).
Without explanation in the contract, the Bride (and potentially a Judge) may provide their own interpretation of what ‘deposit’ or ‘retainer’ means. For example, general public (and some Judges-improperly) will hear the word ‘deposit’ and think “Well, whenever I sign a lease, I have to pay a deposit, and I get that back.” In general, wedding professionals can rebut this inference, as stated, by setting forth, in explicit language, what happens to the money in the event of cancellation.
There is a misconception that ‘retainer’ cannot be used, as it represents ‘payment for future services.’ So, if the event is cancelled, it must be returned because the services were not rendered. Almost exclusively, (but consult with an attorney in your state, I’m serious!), this relates to attorneys, not wedding professionals. Attorneys are regulated much differently than other businesses.
Question – What is the most overlooked item in a contract that can really harm you as a business owner?
Answer – The NUMBER ONE issue that I deal with is “What happens to the money in the event of cancellation?”
Unfortunately, this issues is often not addressed in most vendor contracts.
Question – What wording should I use in my contract to give me the right to use their personal and detail wedding images in my portfolio, blog, submissions, etc?
Answer – You should have them agree that……
- You may take your own images of the event.
- They are cool with their image being used.
- You are going to use the images for x, y, z.
I know that we just covered a hell of a lot of information today so hopefully you’re not super confused. You shouldn’t be – Rob is a pretty straight forward kinda guy. And I find him much easier to understand than your average lawyer.
Be sure to check out his website to read his blog.
Have more legal questions?
Maybe we can have Rob back again soon!