Legal Term
Liquidated Damages Clause in Event Planning Contracts
Legal Definition
A contractual provision where parties agree in advance on a specific sum of money to be paid by one party to the other in the event of a breach, such as cancellation, which is intended to represent a reasonable estimate of the anticipated or actual harm caused by the breach, rather than to punish the breaching party.
In Plain English
A 'plan B' cost you and the event planner agree on upfront. If you cancel the event late, you pay this set fee. It's not a random penalty—it's a good-faith estimate of the money the planner will lose because of your cancellation (like non-refundable deposits paid to vendors and lost profit).
Example in a Contract
CLIENT CANCELLATION. In the event Client cancels this Agreement for any reason other than a Force Majeure event as defined in Section X, Client shall pay Planner liquidated damages as follows: (a) 50% of the total contract price if cancellation occurs more than 90 days prior to the Event Date; (b) 75% of the total contract price if cancellation occurs between 30 and 90 days prior; and (c) 100% of the total contract price if cancellation occurs less than 30 days prior. The parties acknowledge these amounts are a reasonable pre-estimate of Planner's anticipated damages and not a penalty.
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