Penalties for canceling wedding with venue/caterer

[DTDLex]

What is the name of your state (only U.S. law)? California.

We signed a contract at a venue and caterer for a wedding in May 2014. We put down $3000 for both.
We are now considering changing the venue/caterer to another site and not use either. The reason we are changing is because the ballroom we originally booked would look too big with our number of guests, and thus we changed our mind.

The contract we signed says this:
"Cancellation Policy
If you should cancel your event for any reason, Caterer shall be entitled to collect liquidated damages (agreed not to consitute a penalty)
based on the following scale:
from 8/22/13-6 months before to the event date $11,880
Less than (6) months to (6) weeks prior to the event date $22,275
Less than (6) weeks prior to the event date $29,700
Client must notify Caterer by written notice if Client decides to cancel this contract. Payment of liquidated damages are due at that time."

We've only paid $3000 so far. If we cancel now, can they really make us pay $22,275 having not provided us the services of the venue/catering for the wedding?
I'm not really looking for my $3000 back. If they let me, I can use that deposit for other things down the road. But I'm just wondering if they have a legal basis to force me to pay $22,275, and have a collections agency go after me for the money, or hurt my credit. They do not have my credit card or social security number.

Much thanks in advance.

 

[OHRoadwarrior]

According to the terms of the contract you provided they can. I suggest you investigate whether they can partition a section off and use that venue.

 

[sandyclaus]

What is the name of your state (only U.S. law)? California.

We signed a contract at a venue and caterer for a wedding in May 2014. We put down $3000 for both.
We are now considering changing the venue/caterer to another site and not use either. The reason we are changing is because the ballroom we originally booked would look too big with our number of guests, and thus we changed our mind.

The contract we signed says this:
"Cancellation Policy
If you should cancel your event for any reason, Caterer shall be entitled to collect liquidated damages (agreed not to consitute a penalty)
based on the following scale:
from 8/22/13-6 months before to the event date $11,880
Less than (6) months to (6) weeks prior to the event date $22,275
Less than (6) weeks prior to the event date $29,700
Client must notify Caterer by written notice if Client decides to cancel this contract. Payment of liquidated damages are due at that time."

We've only paid $3000 so far. If we cancel now, can they really make us pay $22,275 having not provided us the services of the venue/catering for the wedding?
I'm not really looking for my $3000 back. If they let me, I can use that deposit for other things down the road. But I'm just wondering if they have a legal basis to force me to pay $22,275, and have a collections agency go after me for the money, or hurt my credit. They do not have my credit card or social security number.

Much thanks in advance.

They absolutely can hold you to the cancellation clause of the contract that you read, understood, and signed. What part of that cancellation clause wasn't clear? If this is a fairly popular venue for events, then they lose ALL of the costs involved in your reserving that place and catering staff for your wedding. They may or may not be able to even re-book the location in time to prevent those losses.

If you fail to pay the balance of the $22,275 owed upon invoking the cancellation clause, they can sue you to recover the money. It far exceeds the current $10,000 small claims jurisdictional limit, so you're probably looking at attorneys fees and other court costs if they are forced to sue.

They can send a collections agency after you once the money is due and outstanding. They can report it on your credit as an unpaid account. If they get a judgment against you, based on the significant amount of the balance owed, they will probably end up taking out a wage garnishment, or putting a lien on any valuable assets that you own. With a judgment on your credit report, that could definitely hurt your credit for some time to come. As a newlywed couple, you and your spouse may be looking at major purchases, such as buying real estate, or new cars, or even renting an apartment together. That negative mark can keep you from getting all of that.

 

[Proserpina]

Options:

1. Pay up - will they accept a payment plan?

2. Don't pay and hope that since the amount is too high for small claims, the vendor won't bother taking it to a higher court.

3. Hope to high heaven that if 1 doesn't work, the vendor will be expected to mitigate so the amount may be lowered.

Speaking from experience, this is just about the worst thing you can do to this type of vendor. As you know, fixing the date sometimes has to be done years in advance, specially for a popular location. The vendor can and does often end up completely screwed by the client who cancels not two years in advance, not the night before the event (since a successful lawsuit would be a slam-dunk), but 6 months before the event - it can be nigh on impossible to re-book the event.

 

[swalsh411]

Maybe I live in la-la land but those cancellation penalties amounts seem awfully high to me. Wouldn't the caterer be expected to show they suffered actual damages on at least some level?

 

[Proserpina]

Maybe I live in la-la land but those cancellation penalties amounts seem awfully high to me. Wouldn't the caterer be expected to show they suffered actual damages on at least some level?

Given that some venues cost well into the tens of thousands, it's not necessarily high at all - specially since there are technically two different services being provided.

We're talking a little under 5 months until the wedding; filling the spot at such short notice might be an impossibility.

 

[swalsh411]

We did our whole wedding with 150 people for less than 5k so I guess I do live in la la land.

 

[Zigner]

We did our whole wedding with 150 people for less than 5k so I guess I do live in la la land.

I just finished a wedding for my daughter. Cheapest place we could find for about 150 guests was $8,500 for the venue alone. And when I say cheapest, I mean that we just happened upon it. Literally every other place wanted at least double that.

 

[Silverplum]

I just finished a wedding for my daughter. Cheapest place we could find for about 150 guests was $8,500 for the venue alone. And when I say cheapest, I mean that we just happened upon it. Literally every other place wanted at least double that.

*gives thanks again for sons and traditions*

 

[proud_parent]

*gives thanks again for sons and traditions*

My husband and I waited until our thirties to get married, then had the wedding we could afford to pay for ourselves.

We're hoping that was the beginning of a new tradition for our two daughters.

 

[Zigner]

My husband and I waited until our thirties to get married, then had the wedding we could afford to pay for ourselves.

We're hoping that was the beginning of a new tradition for our two daughters.

I offered cash in lieu of the wedding, but she wanted the big ole wedding. Kids...

 

[Proserpina]

*gives thanks again for sons and traditions*

My first (and uncaffeinated) giggle of the day - thank you!

 

[Proserpina]

We did our whole wedding with 150 people for less than 5k so I guess I do live in la la land.

No no no no.

You're not in la la land.

You're in "fiscally savvy" land.