This week we are featuring a series of legal posts from Katy Carrier, founder of Carrier and Associates
NOTE: Katy no longer practices law, but the information below is still useful.
There is no such thing as a perfect, one-size-fits-all wedding client contract. Every business is unique and has individual requirements, concerns and potential liabilities. But there are certain clauses and terms that can help protect every wedding business from encountering potential problems down the line.
Deposits & Retainers:
Do you require a “non-refundable deposit” to book your services? If you do, it’s time to update your contract, especially if you are a vendor who performs a large portion of your services on the day of the wedding. In the eyes of the law, the term “deposit” is generally used to describe a first payment toward the performance of services. So, if you fail to perform the service (like because the wedding is called off a few months before the big day), the deposit would need to be refunded. It doesn’t matter whether you call it “non-refundable” – if a court finds that you didn’t actually earn the deposit payment, that money must be refunded to the clients. The better alternative is to use the phrase “non-refundable retainer.” Unlike deposits, retainer fees are used both to book services for a specific date, as well as toward expenses incurred after being retained by the clients. Those expenses can include any work done before the actual wedding day, like consultations, meetings, planning and paperwork.
A counterparts clause is typically a simple sentence stating that the parties to the contract are allowed to sign the contract on different copies or through different methods of transmission, like using an electronic signature, a fax or scanning and emailing the signature portion of the contract. Under the counterparts clause, all of these different signatures and methods of transmission are considered to be part of one unified contract.
Arbitration is a type of dispute resolution that is different from a lawsuit filed in a court. Arbitration is much less formal and more private, and can be handled either with or without an attorney, and is generally much less expensive and time-consuming than courtroom litigation in front of a judge. A single arbitrator or a panel of arbitrators is assigned to your dispute to listen to both sides and make a binding decision.
I believe that including an arbitration clause in your client contract is a smart decision. You can allow for exceptions to a mandatory arbitration requirement, such as for unpaid fees owed by clients. If a client owes you just $1,000, it would make more sense for you to sue them in small claims court to recover the unpaid fees, since the costs of arbitration would be greater than the small claims court filing fee. But if a client sues you for breach of contract or personal injury, you’d be much better off going to arbitration rather than being subjected to a costly and time-consuming lawsuit.
Next up we’re going to cover some additional clauses that are important elements of your client contract.