EM Fine Art, a Seattle wedding venue, recently shut down and informed wedding couples that they would not be receiving refunds for any deposits paid. The venue first claimed that it was due to fire damage, but later walked back that claim, and instead asserted that their landlord is canceling their lease. Either way, the venue is invoking the “force majeure” clause it has in its contracts with couples, saying that under the contract language, deposits are not refundable.
I don’t have an opinion on whether that’s true, or whether the couples have a valid legal argument to make in this specific case, because I simply have no idea how the contract reads and also do not know the full facts. But it did get me thinking again about force majeure clauses. I recently wrote a post about Lakeview Pavilion, a Boston-area wedding venue, and how it burned down in early April. In that post I said that couples were likely owed their deposits back. I think my initial analysis may have been wrong.
To briefly summarize the purpose of a force majeure clause, it is meant to relieve a party or parties of their contractual obligation(s) in the event of an “act of God,” i.e. tornado, flood, etc. Unfortunately, many force majeure clauses are too vague and don’t address what happens to non-refundable deposits in the case of a force majeure event. This obviously invites disagreement between wedding vendors and clients with regards to deposits.
I spent yesterday researching case law on force majeure clauses and non-refundable deposits. There were surprisingly few cases on point, and none in Washington or Massachusetts (the two states in which I am admitted to practice law). For that reason, I can’t really offer a strong opinion on how I might expect a court would resolve an instance where the force majeure clause was silent with regard to a deposit. However, the couple of federal and state cases I did find seemed to suggest that non-refundable deposits would indeed be non-refundable after a force majeure event.
Again, this doesn’t mean courts in other jurisdictions would rule the same way. The big takeaway is to make sure, whether you are a client or a vendor, to spell out exactly what happens to any deposits (or other payments already made) in the case of a force majeure event. It’s always best to avoid ambiguity in a contract rather than hope a court interprets things your way.