Contract not signed- refund??

Nukumai

I_Love_Shoes wrote: »

I sent a contract out to a client last year, who confirmed she had received it and sent me the non refundable booking fee via a bank transfer.

Maybe I am missing something, but given that the customer paid a booking fee that was agreed/understood to be non-refundable, then it is non-refundable, so long as you are prepared to carry out your side of the bargain. If she cancels, you keep it, even if you are able to re-book the day in question. I cannot see such an arrangement being deemed as an unfair term.

In addition, it seems you are able to prove that you had sent the contractual terms to the customer at the outset (because she confirmed this via email).

Everything else is white-noise, I think (especially all the talk about mitigable vs non-mitigatable losses).

OP, most reputable solicitors offer an initial half-hour consultation free. Why not take one up on this, as I'm sure that a solicitor - on hearing your story - will take no time to give you a definitive opinion.

I_Love_Shoes

It is stated in the contract that the booking fee is non refundable and based on the fact that they paid after receiving this then yes, I should be entitled to keep it.
I have ongoing adverts for those of you who are asking, so it would be hard to prove much loss over that one specific date, apart from loss of earnings obviously.
I might have a word with a solicitor!
They have obviously called up CAB and not stated the facts, she told me she sent the money before she received a contract and that a contract never turned up, then contradicted herself because I have proof she received it via email and she just told me shes found part of it in the garage! Im sure if she said shes sent money with no contract to CAB then they will advise her that she is entitled to a refund as there is no contract or terms she is agreeing to by sending the money. Luckily I have proof she is wrong

arcon5

This is known as anticipatory breach of contract... And op would be expected to mitigate his losses by trying to rebook the date. As all the regulars know and as mentioned in the FAQ, simply stating 'the deposit is non-refundable' doesn't necessarily mean that is the case - remember a deposit should be a pre-estimate of losses in case the contract is breached. So for example if her deposit was £1k you would struggle to justify keeping it all.

If it went to court your best bet would be to defend along the lines of 'consumer has notified is of her intention to breach the contract and we will endeavour to find a new customer for the day in question. At present the deposit is being held to cover our losses such as administration, re-advertising and potentially loss of profit'... Admittedly I don't know how a judge would see this but I would hope the judge, bearing in mind the small deposit left would not find in the claimants favour at that point in time. Although I don't have a clue how it would go down to be honest.

somethingcorporate

Please read the FAQ regarding deposits here: http://forums.moneysavingexpert.com/showpost.php?p=42873192&postcount=16

There is no such thing as a non-refundable deposit in a contract unless it is a genuine pre-estimate of loss, whether you write it in the contract or not. If it would amount to a financial penalty the customer will win in court.

If you can prove you will lose £100 as a result of the cancellation then you will be able to retain it. If you cannot or the judge agrees it amounts to a financial penalty then you will lose the case and be forced to refund whatever the amount the penalty amounts to, on a bad day I would guess this could amount to the full £100.

It would not take much for you to prove such a small amount given wasted time, calls, advertising etc but you need to prove you have mitigated your loss.

Personally, for the sake of your reputation I would refund for the £100. If you end up going to court it could cost you a lot more in potential custom. You may also want to review your contract in light of the non-refundable element. If you replace the booking with no additional cost to yourself that would likely be an unfair term.

unholyangel

arcon and somthingcorporate are right. Stating a deposit is non-refundable is not always legally binding and can be seen as a financial penalty (which is unenforceable in law).

However you could replace that term with a new term stating that they are liable for any losses reasonably incurred by you if they cancel and you are unable to rebook their chosen date.


Nukami, you may want to research before you post as mitigation of loss is not just "white noise". It is a very basic element in all breach of contract cases and the other party has a statutory duty to mitigate their losses. In other words, it is a requirement under law and not something you have a choice over.

somethingcorporate

Nukumai wrote: »

Maybe I am missing something, but given that the customer paid a booking fee that was agreed/understood to be non-refundable, then it is non-refundable, so long as you are prepared to carry out your side of the bargain. If she cancels, you keep it, even if you are able to re-book the day in question. I cannot see such an arrangement being deemed as an unfair term.

In addition, it seems you are able to prove that you had sent the contractual terms to the customer at the outset (because she confirmed this via email).

Everything else is white-noise, I think (especially all the talk about mitigable vs non-mitigatable losses).

OP, most reputable solicitors offer an initial half-hour consultation free. Why not take one up on this, as I'm sure that a solicitor - on hearing your story - will take no time to give you a definitive opinion.

I agree with Unholyangel - you're wrong on so many points. Just because you think it is white noise and that they are allowed to keep the customers money just because is says is non-refundable does not make it law or fact. Financial penalties in contracts are unfair terms, whether you think it is reasonable or not.

Mitigation is absolutely key in the OP in being able to defend keeping some or all of the £100 deposit so suggesting it is white noise is absolutely the worst thing to do.

bris

somethingcorporate wrote: »

I agree with Unholyangel - you're wrong on so many points. Just because you think it is white noise and that they are allowed to keep the customers money just because is says is non-refundable does not make it law or fact. Financial penalties in contracts are unfair terms, whether you think it is reasonable or not.

Mitigation is absolutely key in the OP in being able to defend keeping some or all of the £100 deposit so suggesting it is white noise is absolutely the worst thing to do.

Considering a photographer charges mostly for his/her expertise then £100 will be a small percentage of the losses they will incur due to the breach. I think talking about financial penalties in this case is far off the mark.

I_Love_Shoes

Obviously when I charge for a wedding I factor in costs such as equipment (which is bloody expensive), training, materials (such as CDs and paper) and advertising etc, but I couldnt pin point the £100 into certain areas as its broadly used to go towards new equipment, advertising in general and things like that, and obviously a bit of profit after I factor in all the other bits!
It would be hard to say out of that £100, £10 went towards XX, £50 went towards XX etc.
Or can I just say that the majority is going towards new equipment and therefore I have suffered a loss?
Hopefully they cant be bothered to take it to court, shes not the smartest to say the least and hes out of the country...

halibut2209

You are getting too complicated now. You don't need to work out percentages or proportions. You are entitled to retain ALL losses that were exclusive to THIS booking. If you can't rebook, then your losses would be the full amount you would have been paid.

unholyangel

halibut2209 wrote: »

You are getting too complicated now. You don't need to work out percentages or proportions. You are entitled to retain ALL losses that were exclusive to THIS booking. If you can't rebook, then your losses would be the full amount you would have been paid.

Actually isnt there something in unfair contract terms that state you can only claim your net costs or loss of profit, not both as this would lead to you being compensated twice over?

In other words, cant claim full amount as OP wouldnt have to pay out for all the expenses they would have to if the breach hadnt occurred (travelling expenses being the most obvious).

A way to improve the fairness of such a term is to ensure that it does not go beyond the ordinary legal position. Where cancellation is the fault of the consumer, the business is entitled to hold back from any refund of prepayments what is likely to be reasonably needed to cover his net costs or the net loss of profit resulting directly from the default. There is no entitlement to any sum that could reasonably be saved by, for example, finding another customer.

Other kinds of penal provisions which may be unfair are damages and costs clauses saying that the supplier can:
• claim all his costs and expenses, not just his net costs
• claim both his costs and his loss of profit where this would lead to
being compensated twice over for the same loss
• claim his legal costs on an 'indemnity' basis that is, all costs, not just
costs reasonably incurred. The words 'indemnity' and 'indemnify' are
also objectionable as legal jargon – see below, Part IV, Group 19(b).