What is the current effect of coronavirus on my wedding contract?
The coronavirus (COVID-19) pandemic significantly altered many peoples plans for 2020, many couples that were due to get married last year postponed their weddings in the hope that ceremonies and receptions would be able to take place at a later date. Following the Prime Minister’s announcement we are once again in a state of ‘lockdown’ and, except under exceptional circumstances, weddings and civil partnership ceremonies are again unable to take place. The restrictions are expected to be in place until at least the middle of February but it is likely that further restrictions on guest numbers will be in place beyond this date.
Due to the ongoing uncertainty, many couples are now looking to cancel their weddings until more definite plans can be made. This blog explains the financial implications of cancelling a wedding due to COVID-19 restrictions.
What is frustration?
Where a wedding is unable to take place due to lockdown restrictions, the wedding contract is deemed to be ‘frustrated’. COVID-19 and the lockdown restrictions can be considered frustrating events as, due to no fault of either party, performance of the contract can no longer take place. When a contract is frustrated the consumer is entitled to a refund, if money has already been paid, and no further payments will be due.
If lockdown measures are eased and weddings are allowed to take place, it may well be that limits will again be placed on the number of guests that can attend. If this number is significantly less than the number the number agreed in the contract with the venue/supplier, then the contract may also be deemed frustrated.
As discussed above, where a contract has been frustrated, the consumer is entitled to a refund of any money paid including any ‘non-refundable’ deposits. Many wedding contracts also contain cancellation clauses where a fee is payable if the wedding is cancelled within a certain timeframe of the event taking place, where a contract has been frustrated then these fees should not be payable. The venue/supplier can however deduct some costs incurred organising the wedding, although it is clear that these costs should be reasonable and businesses should show that they have mitigated their losses, furthermore only certain types of costs can be retained by businesses.
In instances where businesses have already provided some of the services agreed and incurred costs, it may be just for these to be deducted from any money due back to couples. Legislation governing the retention of such costs does not specify exactly what can and cannot be retained however the CMA believes that the cost of food already purchased or business overhead costs which are specific to the wedding in question are among the costs which may be retained businesses.
There are several costs incurred by businesses which the CMA does not believe should be recoverable. This includes: costs which provide re-useable benefit to the business (for example maintenance costs); general costs associated with running a business; and costs which could be recovered twice, for example with the assistance of a government support scheme. It is also clear that businesses should not charge any fee for providing a refund.
How can Ellis Jones help?
Since the start of the pandemic we have assisted many couples whose weddings have been postponed or cancelled due to COVID-19 restrictions, as well as suppliers who are concerned about the enforceability of their contracts, to come to resolve disputes concerning these important events. If you would like advice on how best to deal with the situation, please contact our Dispute Resolution team by emailing Henrietta.Dunkley@ellisjones.co.uk to discuss your case and how we may be able to assist.