What Should Your Event Vendor Cancellation Clause Say?

Your event vendor cancellation clause should clearly say what happens if your client cancels, postpones, reduces the booking or changes the date. At a minimum, it should cover notice periods, deposits, non-refundable costs, rescheduling, what you can charge, and when either party can walk away.

That sounds simple, but event work is rarely neat. You may have turned down other jobs, booked staff, ordered flowers, hired equipment, paid subcontractors or spent hours planning a wedding, party or corporate event before the client changes their mind.

The goal is to protect your business without overreaching. A strong cancellation clause should help you recover fair costs and lost income, while still being clear and reasonable under New Zealand consumer and fair trading laws.

Can You Charge A Cancellation Fee If A Client Cancels An Event?

Yes, you can usually charge a cancellation fee if your contract or terms of trade clearly allow it and the fee is fair in the circumstances. The safest approach is to link the fee to the real impact of the cancellation on your business.

For example, your cancellation fee might reflect:

• time already spent planning, designing, coordinating or preparing
• materials, stock or equipment you have already bought
• subcontractor or venue-related costs you can't recover
• income you're likely to lose because you held the date for that client
• admin time spent changing rosters, suppliers and schedules

Where event vendors get into trouble is when the fee looks more like a punishment than a fair recovery of loss. In New Zealand, a clause can be challenged as a penalty if the amount is out of proportion to the legitimate interest your business is trying to protect.

If you use standard terms with consumers or small businesses, the Fair Trading Act 1986 also matters. Unfair contract term rules can apply to standard form consumer contracts and standard form small trade contracts. A term that gives you a very broad right to keep all money paid, while giving the client little protection, can attract scrutiny.

This doesn't mean you need to absorb every cancellation cost. It means your policy should be transparent, balanced and commercially sensible.

What Should Your Deposit Clause Say?

Your deposit clause, as part of your event planning agreement, should say what the deposit secures, when it's due, whether it's refundable, and what happens to it if the event is cancelled or postponed. Don't rely on a verbal comment or a line on an invoice if the booking is important to your business.

For many event vendors, the deposit does two jobs:

• it confirms the booking and reserves the event date
• it helps cover early costs and planning time

If your deposit is non-refundable, say so clearly before the client pays it. For example, your contract might say the deposit is non-refundable because you reserve the date, begin planning and may turn away other work.

Still, non-refundable doesn't always mean you can keep every dollar in every situation. If a client challenges the term, the fairness of the clause may depend on factors like:

• how much notice the client gave
• whether you had already done work or incurred costs
• whether you could rebook the date
• whether the amount kept is proportionate
• whether the term was brought to the client's attention before payment

Say Mia runs a wedding floristry business in Wellington. A couple books her 12 months out and pays a 30% deposit. Mia orders specialty vases, does two design consultations and turns away another wedding for the same date. If the couple cancels six weeks before the wedding, a clear non-refundable deposit clause gives Mia a much stronger basis to keep the deposit than if she had only discussed it casually over email.

Templates often miss the detail that makes a deposit clause work for a real event business. If your costs vary depending on the type of booking, your clause should reflect that.

How Much Notice Should Your Event Supplier Cancellation Policy Require?

It depends on how your business operates, but your policy should use clear notice periods that match your booking cycle and cost commitments. A wedding photographer, mobile caterer and AV supplier may all need different cancellation timelines.

A common structure is to use stages. For example:

• cancellations more than 60 or 90 days before the event may lose the deposit only
• cancellations 30 to 60 days before the event may require payment of a percentage of the total fee
• cancellations within 14 or 30 days may require payment of most or all of the fee, less costs you genuinely save

There's no single statutory notice period that works for all event services agreements in New Zealand. The right periods depend on your lead times, seasonality, ability to replace the booking and when your supplier costs become locked in.

Try to avoid vague wording like reasonable cancellation charges may apply. It may feel flexible, but it can create arguments later. Your client should be able to read the clause and understand the likely financial outcome if they cancel.

A Practical Way To Set Your Periods

Work backwards from the event date and ask yourself:

• when do you start turning away other bookings?
• when do you need to roster staff or contractors?
• when do suppliers require deposits or full payment?
• when do materials become customised, perishable or hard to reuse?
• how close to the event could you realistically replace the booking?

Your cancellation policy should be built around those real pressure points. That makes it easier to explain and easier to defend if a client pushes back.

What Happens If A Client Postpones Or Changes The Event?

Your contract should treat postponement and major changes separately from cancellation. A postponement may be manageable if you're available on the new date, but it can still create extra costs and lost opportunities.

A good rescheduling clause in your business terms and conditions should cover:

• how much notice the client must give
• whether postponement is subject to your availability
• how many times the client can reschedule
• whether the deposit transfers to the new date
• any rescheduling fee or extra admin fee
• what happens if your prices increase before the new date
• what happens if you aren't available on the new date

For example, you might allow one postponement if the new date is within 12 months and you're available. You might also say that if the client postpones again, or chooses a date you can't service, the booking is treated as a cancellation.

Changes to the event can also affect your costs. A client might reduce guest numbers from 120 to 40, change the location, extend the finish time, add extra equipment or remove a major part of the package. Your contract should say when a change requires a new quote or written approval.

This is especially useful for wedding vendors. Wedding bookings often change as the guest list, budget and plans shift. Without clear variation terms, you may find yourself doing more work for the same price or absorbing costs you never priced for.

Do You Need A Force Majeure Clause In An Event Contract?

Yes, most event vendors should have a force majeure clause because events can be affected by things outside anyone's control. In New Zealand, your contract should spell out what happens if an event can't go ahead because of an unexpected external event.

A force majeure clause usually deals with events such as:

• extreme weather or natural disasters
• fire, flood or serious damage to a key site
• government restrictions or public health orders
• transport shutdowns or major supply chain disruption
• power outages affecting delivery of the service
• serious illness affecting a sole operator, where no reasonable replacement is available

New Zealand contract law doesn't give you a neat automatic force majeure right just because performance becomes difficult or expensive. The clause needs to be in your contract and it needs to say what the result is.

Your clause might allow:

• rescheduling to a new date
• a credit for future services
• cancellation without further liability
• deduction of non-refundable third-party costs
• refund of amounts paid for services not yet performed, where appropriate

There's also a separate legal concept called frustration, which may apply in rare cases where the contract becomes impossible or radically different from what was agreed. It's a high bar and not something you want to rely on as your main plan. A clear force majeure clause gives you far more certainty.

How Do The Fair Trading Act And Consumer Guarantees Act Affect Your Clause?

They affect your clause because many event vendors deal with consumers, and your cancellation terms must be clear, fair and not misleading. This is especially relevant for weddings, birthdays, private parties and family celebrations.

Under the Fair Trading Act 1986, you must not mislead clients about your prices, refunds, cancellation rights or what is included in your service. If your website says deposits are fully refundable but your contract says they're not, that inconsistency can create a real problem.

The unfair contract term rules under the Fair Trading Act can also apply to standard form consumer contracts and small trade contracts. A cancellation clause is more likely to be fair if it:

• is written in plain English
• is easy to find before the client pays
• doesn't let you keep more money than is reasonably connected to your loss or costs
• gives both sides a workable process if something outside their control happens
• doesn't give your business broad discretion with no explanation

The Consumer Guarantees Act 1993 can also apply where you provide services to consumers. It includes guarantees that services will be carried out with reasonable care and skill, be fit for purpose where the client relies on your skill and be completed within a reasonable time if no time is agreed.

You generally can't contract out of the Consumer Guarantees Act for consumer clients through your terms of sale. For business clients, contracting out may be possible in some situations if it's fair and reasonable and both parties are in trade, but the wording needs care.

The practical point is simple: your cancellation terms shouldn't try to take away rights the client can't legally lose. They should explain your commercial position in a way that's accurate and balanced.

What Should Your Event Services Agreement Include?

Your event services agreement should include the cancellation clause, but it should also cover the wider booking terms so the cancellation clause has something solid to sit within. A cancellation policy on its own won't always answer the bigger questions.

Your agreement should usually cover:

• the event date, time, location and type of service
• exactly what is included in your package or quote
• what is excluded or charged separately
• deposit, payment schedule and late payment terms
• cancellation fees and notice periods
• postponement, rescheduling and changes to scope
• force majeure and events outside either party's control
• client responsibilities, such as access, approvals, guest numbers and venue requirements
• your right to use subcontractors, if relevant
• intellectual property, such as photos, designs, music, styling concepts or creative materials
• privacy wording if you collect personal information from clients or guests
• limits of liability where appropriate

If you collect names, phone numbers, dietary information, guest details or images, the Privacy Act 2020 may also be relevant. You should only collect personal information you need, keep it secure, and be clear about how you use and share it. For example, if you pass guest dietary details to a caterer, your privacy wording should match what you actually do.

If your business name, logo or package name is becoming recognisable, you may also want to think about trade mark protection through IPONZ. That's separate from your cancellation clause, but it's part of building a more protected event business.

Common Mistakes To Avoid

Most cancellation problems come from unclear wording, not bad intentions. A few careful changes can make your contract much easier to use when a client changes the plan.

Calling Every Payment A Non-Refundable Deposit

If a payment is really an advance payment for services, calling it a deposit won't automatically make it non-refundable. Be clear about what each payment is for and when it becomes earned or payable.

Keeping 100% In Every Situation

A blanket rule that lets you keep the full fee no matter when or why the client cancels may be hard to justify. If that's genuinely necessary for your business, get tailored advice on how to structure it fairly.

Forgetting Supplier Costs

If you pay florists, hire companies, entertainers, assistants, printers or other suppliers, your contract should let you recover non-refundable third-party costs. Otherwise, you may be left out of pocket even if the client caused the cancellation.

Letting Clients Reschedule Indefinitely

An open-ended rescheduling right can tie up your calendar for months or years. Put limits around availability, timeframes and the number of permitted changes.

Hiding The Policy After Payment

Your cancellation terms should be given to the client before they pay a deposit or confirm the booking. If the first time they see the policy is after payment, it may be harder to rely on.

Key Takeaways

• Your cancellation clause should clearly cover cancellation, postponement, rescheduling and changes to the event.
• Deposits can be non-refundable, but the term should be clear, upfront and connected to real business costs or lost opportunity.
• Cancellation fees work best when they use sensible notice periods and reflect the impact on your business.
• A force majeure clause is useful because New Zealand law doesn't give you an automatic answer for every event outside your control.
• The Fair Trading Act 1986 and Consumer Guarantees Act 1993 can affect your terms, especially when you deal with wedding and private event clients.
• Your event services agreement should match how your business actually books staff, suppliers, stock and dates.

If you'd like help with your event services agreement, cancellation terms, deposit wording or rescheduling clauses, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.