Cancelled weddings: are you struggling to get a refund?

We have been offered a refund by our venue as our wedding can no longer go ahead as planed due to the government restrictions and they could not offer us a suitable postponement date. This leaves us in the position that we are having to contact suppliers to say that the day is not going ahead. We are not sure what are rights are regarding getting deposits back from suppliers, or whether it’s fair for them to charge a cancellation fee, as we are the ones informing them that the day is no longer going ahead. Our insurance provider won’t pay out either.

Further to malcolm r’s comment:

Contract frustration is a legal principle that basically acknowledges that neither party would have entered into a contract with the benefit of foresight, because the contract would later become impossible to execute due to some unforeseen event or the consequences of that event. In this case, you would not have planned your wedding in June and/or the venue would not have accepted your booking for that date, had you known it would be illegal due to Covid-19.

Such a “supervening event” must not have been anticipated by either party and is not covered by any specific contractual clause. If your contract includes a force majeur event that is specific enough, e.g. “a pandemic”, you could not use frustration to cancel your contracted obligations, even if it makes the contract more onerous or expensive to perform. (Always provided the term is fair.)

If parties to a contract agree, or the court determines, that frustration has occurred, the contractual obligations of both parties cease from that moment, and neither party can hold the other liable for any breach of contract or claim damages. The contract is effectively discharged, as though all obligations had been fulfilled. However … .

Law Reform (Frustrated Contracts) Act 1943 only deals with the fair apportionment of sums paid and expenses incurred prior to contract frustration. It does not legislate on whether contract frustration has actually occurred.

It seeks to provide guidance to the courts as to how both parties to the frustrated contract should have sums paid or payable treated, and what expenses already incurred towards meeting their respective obligations can be recovered. Prior to the 1943 Act, one or other parties to a frustrated contract could end up with an unjustified benefit. For instance, sums already paid in the form of a deposit or in full might not be recoverable. Until passing of the Act, the legal position was pretty much: “Stop what you are doing, the contract is at an end.”

Law Reform (Frustrated Contracts) Act 1943 provides that:

– Sums already paid (like a deposit) are recoverable.

– Sums payable (like a stage payment or the balance in full) cease to be payable.

As Lauren says: you are entitled to a refund of all sums paid in respect of the contract.

But this is where it can get tricky. Rather like a divorce settlement, the law tries to put both parties in the financial position they would have been in prior to the divorce. We know this is impossible in practice.

If either party has received a “valuable benefit” before the contract is discharged, the cost of providing that benefit can be withheld. So, for instance, if you have had the benefit of extensive wedding planning, food tasting, overnight accommodation, etc., the venue could retain or seek to recover those costs, provided they are reasonable.

Furthermore, either party can include unrecoverable overheads, including work or services already performed and any sums payed or due to third parties, as a result of those contracts being discharged in turn. So, for instance, you might have requested the venue to provide a specific marquee, entertainment, or buy in an exclusive brand of Champagne they would not normally provide as part of the standard wedding contract.

Interestingly, under Section 1.5, the 1943 Act appears to discount any sums separately recoverable under a contract of insurance, unless such insurance was a specific term of the frustrated contract.

My (correct?) interpretation of this is, for instance, if your contract with the venue required you to insure against cancellation due to a pandemic, you could not then recover your deposit from the venue. On the other hand, if you took out wedding insurance of your own accord, a general sum paid out would not need to be taken into account. Similarly, the venue’s own insurance cover for loss of business due to a pandemic would not need to be taken into account.

This is where you would probably need the help of someone like Which? Legal to help mediate in any claim for expenses. If the case ended up going to court, I would expect both parties to have to cover their own costs. After all, contract frustration acknowledges that neither party is at fault. Early and sensible legal advice arbitration could be a lot cheaper in the long run.

I don’t know if you can answer this as I am writing as a venue rather than a consumer. We have now postponed 28 weddings free of charge and given couples a large choice of dates and they are all very happy – except one. We have offered this couple 18 months to choose a new date with no extra charge. They had a new date pencilled in but wanted to claim on their insurance. We wrote to them telling them the ceremonies office had contacted us to say they could not carry out any ceremonies. The couple then cancelled their wedding. They do not want a new date but also want all their money back (they had paid in full having waited until a week before their wedding day to cancel). They will not speak to us and threatened legal action if we did not repay the monies in full. We have had lots of emails going back and forth. We have said we will need to retain some money to cover irrecoverable costs and they want a breakdown. We would like to find a solution but they will not speak to us and have dug their heels in. Saying that, we do not want to refund them all the money as we have had to maintain the building, pay rent, wages, gardening etc. We do not do any catering as we are a dry hire venue but the venue is fully decorated so that is all included. Any advice would be really welcome. Many thanks