What should businesses do if a wedding has been cancelled or postponed? Emma Ward, partner and solicitor in Nelsons’ dispute resolution team, explains the options
With large weddings no longer able to take place across the UK as a result of the coronavirus pandemic, thousands
of venues and suppliers are losing out on business at what has always been one of the most lucrative times of the year.
Since lockdown measures were introduced on 23 March, according to a study by wedding planning app Bridebook an estimated 64% of weddings globally have been forced to cancel or postpone, leaving many businesses wondering what they should be doing if this affected them and work they were contarcted too carry out..
On Tuesday, 23 June, the government announced that wedding services for up to 30 people will be allowed to take place from 4 July, providing social distancing guidelines are adhered to.
“While there is a glimmer of hope on the horizon, the question remains as to what businesses in the wedding industry can do when faced with a slew of cancelled events and requests for postponement or cancellation,” says solicitor Emma Ward.
“The changes announced by the government apply only to wedding ceremonies, with large wedding receptions or parties remaining prohibited. Receptions and parties will only be able to take place with a maximum of six people from different households (in which case, the celebrations will need to take place outdoors and with social distancing), or with no more than two households (in which case the party can be indoors or outdoors but again, social distancing will need to be observed).
“According to wedding website Hitched, the wedding industry is worth in excess of £10 billion each year – with the average wedding (from engagement through to honeymoon) costing £36,000. These are clearly very large figures but perhaps not that surprising given the number of different businesses that provide their expertise and products to the happy couple.
“From venues and florists to photographers and live bands, all these industries, like so many others, will be reeling not only from the impact of Covid-19, but also the refusal of many insurers to accept claims made under either business interruption insurance or wedding insurance.”
So what should a business do when a wedding is cancelled or postponed? According to Emma, the first step in most cases will be to have a look at the contract – what did you agree? Is there a clause that dictates what will happen in the event that either party cannot perform their obligations under the contract due to circumstances outside their control (known as force majeure)? Does that clause stipulate what will happen in relation to any money paid or due at the date of the force majeure event?
“If there is no such clause,” explains Emma, “suppliers will need to consider whether the contract has been frustrated by an event that was unforeseen when the contract was entered into. A contract can be frustrated if:
1. The contract becomes impossible to perform and/or either party’s obligations become radically different because of that unforeseen event.
2. The contract does not expressly say what will happen in such circumstances.
3. The unforeseen event was not caused by either of the parties.
“In the case of contracts entered into before any news reports of coronavirus began to emerge, it seems pretty safe to say that a contract to deliver the wedding ceremony and breakfast, for example, would be considered to be frustrated. If the doctrine of frustration does apply, the contract is immediately brought to an end, with the parties discharged from any outstanding contractual obligations.”
And what if the contract is terminated, does a supplier need to refund money that has been paid?
“Under the Law Reform (Frustrated Contracts) Act 1943, any advance payments made before the occurrence of the frustrating event will be entitled to be recovered, subject to the ability of the receiving party to offset any expenses already incurred,” says Emma.
“If you’re the venue therefore, and you’ve already ordered food and drink for the wedding breakfast and your contract entitles you to receive a pre-payment as at the date the contract is discharged, you’re entitled to be paid for those expenses incurred.
“Likewise, if you’re the florist who has ordered flowers and your contract includes provision for you to be paid in advance, with the date for payment having passed, you would be well within your rights to require that pre-payment be made, up to the cost of those flowers.
“If the venue or florist’s contract does not include provision for pre-payment (or the time for that pre-payment has not passed), even if it has incurred expenses prior to the contract being discharged, the venue/florist will not be able to claim those from the couple.”
One question frequently asked now is what is the situation if the couple want to postpone the wedding, now that weddings can take place again.
“While small wedding ceremonies were able to take place from 4 July, it is likely that couples who were planning larger ceremonies in the coming months will want to hold off on their plans due to the restrictions on attendee numbers.
“Again, you’ll need to have a look at your contract to see if it contains terms that would deal with a request to postpone or cancel. Of particular concern for many businesses will be whether or not you can keep deposits paid or require that the couple make payment to you for what would (in the case of a postponement) be a variation to the contract or (in the case of a cancellation) be a termination of the contract.
“In either case, suppliers should bear in mind not only the strict terms of the contract, but also the impact of consumer protection legislation, such as the Consumer Rights Act 2015, which confirms that terms in a consumer contract must be fair (this applies equally to the force majeure point, mentioned earlier).
“While this should always be a consideration for businesses when drawing up contracts, the Competition and Markets Authority recently confirmed that it considers exceptions to a full refund of deposits paid to be ‘rare’ if the contract has not been performed as agreed,” says Emma.
“In times like this, it’s very easy for businesses to get overly hung up on their legal rights; clearly these are important, but they do risk obscuring the commercial reality of a situation.
“It might be the case that your contract will enable you to retain a deposit or require that a prepayment for a cancelled wedding still be made. In some instances, it may be absolutely critical to the business’ continued existence that those payments are made.
“However, if finances allow (particularly bearing in mind the support available to business through the Coronavirus Job Retention Scheme (CJRS), support grants and business interruption loan scheme), it would be worth remembering that the engaged couple want to get married and they want to do that at your venue/using your flowers/dancing to your music/wearing that dress..
“It may be possible to reach an agreement with them that secures their business with you in say six months’ time – you may find that such an agreement is more profitable than insisting on payment of what is likely to be a fraction of the amount that would be payable if the wedding goes ahead later in the year or next year.”
For more information visit www.nelsonslaw.co.uk/business-