More details to this question:
I booked my Wedding at a venue, but prior to signing a contract i expressed that i would like a food tasting first. Vendor told me that they only do food tasting after the wedding is booked and two months prior to wedding. I felt that i had no choice since they were giving me the best deal. After putting a $500 deposit and signing a contract. I called the following day and explained that i have buyers remorse, i told them i did not feel comfortable having a wedding and not having tasted the food. They told me not cancel and that they will let me have a food tasting in two weeks, i agreed. After i tasted the food, i did not enjoyed it and got a little sick afterwards. I called about two weeks later explaining that i was not interested because the food was not for our liking, and they told me that even though i am cancelling 9 months in advance that i am liable for 75% of the total wedding cost. Can they do this, even if the service they are providing is not good?
1 ANSWER
In consideration of receiving a good price, you agreed to book the venue without a prior taste test. Unless the contract gave you the right to cancel if you were dissatisfied with the taste test, I don't think you have a right to cancel on that basis, although if you really became ill you might have a chance. However, even if the contract provides that you must pay 75% of the wedding cost if you cancel, I'm not sure that this provision, known as a liquidated damages provision, would be enforceable. In order for a liquidated damages provision to be enforceabel under NY law (I assume that both you and the venue are in NY) actual damages from a breach must not be readily ascertainable and the liquidated damages amount must be a reasonable attempt to approximate what the actual damages would be. I'm not sure that this clause meets either requirement. If the venue is unable to rebook another party, damages would be the amount you were to pay minus the expenses the venue saved by your cancellation (unless it was considered what is known as a lost volume seller, but I don't want to get too technical here.) If it was able to rebook another party, the venue may have no damages or, if it received less than it would have from you, its damages would be the difference minus any saved costs. With regard to "reasonable approximation", I can't believe the venue operates on a 75% profit margin. Let's say that you agreed to pay $20,000 for the venue. It would have to expend money on food, liquor, waiters, heat (or air conditioning), valets, chefs, etc., all of which it will save if you cancel, even assuming that it can't rebook a party in 9 months. I don't believe that these expenses do not come to well more than 25% of the total price.
Answered on May 14th, 2014 at 6:39 PM