What to do if we have to cancel a caterer for a wedding at the 3 weeks prior to the wedding because of a job loss?

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What to do if we have to cancel a caterer for a wedding at the 3 weeks prior to the wedding because of a job loss?

The caterer has threatened to take us to court and sue us for the money owed even though services have not been rendered. Is that possible even with a deposit in place?

Asked on September 25, 2013 under Business Law, Georgia

Answers:

Paula McGill / Paula J. McGill, Attorney at Law

Answered 7 years ago | Contributor

LICENSED IN GEORGIA

A deposit generally holds the place and is used if the contract is cancelled.  However, this is not always the case.  Is there a written contract in place?  Has she spent money on the contract?  What is her net loss and what was her expected profit?  

If she takes you to court, she won't get the gross amount of the contract, because she would not have pocketed that gross amount.  In short, if I have a contract for $10,000, but my expenses would have been $6,000, my profit would be only $4,000.  

So, she would be entitled to $4,000 plus any expenses she expended prior to you giving notice less the deposit you gave her.

Also, three weeks may be sufficient time to find a substitute affair, even if it's a smaller contract.  Under that scenerio you may still have to pay for damages, but it would be smaller than if she could not find anything.    

 

Anne Brady / Law Office of Anne Brady

Answered 8 years ago | Contributor

This depends on what your contract with the caterer states.  The contract should say how much notice you need to give to cancel the contract without having to pay.  If, for example, the contract states that you need to give 30 days notice to cancel and you only gave three weeks, you will have to pay the caterer.


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