Weddings are supposed to be the most joyous of times yet today’s environment has led to the unimaginable and potentially fraudulent practice of wedding venues and banquet halls refusing to refund deposit monies amid the COVID-19 pandemic.
Disruptions caused by the COVID-19 outbreak have, in some circumstances, made it entirely impossible or impractical for parties to fulfill their duties and obligations under contracts for goods and services. To seek economic relief from such scenarios, it is important to look to the contract’s “force majeure” clause, which typically establishes legal defenses to a party’s contractual obligations. Oftentimes, this clause is triggered due to impossibility of carrying out a wedding as a result of COVID-19 and related government directives.
Our approach:
These claims can be extremely time sensitive depending on the anticipated wedding date; deposit deadlines; deadline to deliver guest lists, and other related terms and conditions. Formal notice should be forwarded immediately, advising the venue that because the terms of the contract cannot be fulfilled under New Jersey law, we are exercising the right to cancel the agreement and demand a full refund of any and all deposit monies.
Review the contract in-depth to determine whether the agreement contains a “force majeure” or “act of God” provision that may prevent or impair party performance. Look to see whether any of the following events are specifically referenced in the clause: “public health crisis” – “disease outbreak” – “pandemic” – “epidemic”.
Enforcement of these contractual terms usually requires “reasonable notice” to the other party advising that we are affirmatively exercising the force majeure clause. This should be done immediately and formally by way of mail or email, unless the contract states otherwise. In triggering this clause, we must demonstrate the scope and extent of the impairing or interfering circumstances due to the COVID-19 pandemic. To that extent, we must carefully analyze the original agreement and any subsequent or amended contracts. Further, we must specifically point to our clients’ position that fulfilling required duties is impossible and/or impractical and/or the hardship is so clear and egregious that it would be so fundamentally unfair to carry out such obligations as well as a significant threat to the health and safety of the general public. We have also encountered situations in which the venue has deceptively removed “refund deposit language” from an amended contract that was present in the original contract without informing my clients.
Additional Strategic Considerations:
Using government directives to support our legal position against the venue in retrieving client deposit money:
On March 9, 2020, Governor Phil Murphy declared a State of Public Health Emergency for the State of New Jersey by way of Executive Order No. 103, “to ramp up New Jersey’s efforts to contain the spread of COVID-19”. The State of Emergency remains in effect.
On March 13, 2020, under section 319 of the Public Health Service Act (42 U.S.C. 247d), the U.S. President, Donald Trump, by and through the Secretary of Health and Human Services declared a Public Health Emergency “to control the spread of the virus in the United States”. The Public Health Emergency remains in effect.
Governor Murphy’s Executive Order No. 157 has allowed entertainment business to open, “provided that policies include, but are not limited to, limiting the number of patrons in any indoor premises to 25% of the stated maximum capacity”.
What is the significance of this?
In each dispute we have handled thus far, the wedding venue has required our clients to pay for a minimum number of guests, irrespective of whether that many guests will actually attend the event.
Example:
Wedding venue requires clients to pay for a minimum of 150 guests; the venue’s website shows a maximum capacity of 200 people; per Executive Order No. 157, the venue cannot legally allow more than 50 guests to attend (25% capacity), yet, the venue is still charging clients for an additional 100 guests that will not be present. Why should you pay for goods and services NOT being rendered to and for you?
Governor Murphy’s Executive Order No. 157 also specifically banned the use of dance floors at indoor establishments as they are “by their very nature are designed to facilitate especially close person-to-person contact”.
Governor Murphy’s Executive Order No. 158 stated that due to recent spikes in COVID-19 cases “attributed to indoor food and beverage establishments, and given the well-established risks that such establishes present . . . it is necessary to temporarily pause the resumption of indoor dining in New Jersey”.
Based on the above, a wedding venue cannot, as things sit today, provide the goods and services in which you contracted and paid for. In certain circumstances and, specifically, when these facts are present, we have asserted claims sounding in breach of contract, fraud, and consumer fraud under the New Jersey Consumer Fraud Act, which provides potential relief that includes not only refunding of deposit monies, but also attorney’s fees and treble damages if successfully proven.
Please note that each matter is handled on a case-by-case basis with their own unique set of facts and parties so outcomes may vary. Additionally, the circumstances surrounding the COVID-19 virus and the State’s response to same are subject to change daily and, therefore, this article is meant for educational purposes and to advise of your right to legal recourse.
If you and your family find yourself in this situation, please do not hesitate to contact us immediately as the ability to recover deposit monies may be extremely time sensitive.
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732-410-5350