Deposits and cancellation: what the law actually turns on

What the policy has to decide

Before any legal question arises there is a commercial one, and it is worth separating them. A deposit and cancellation policy is answering a short list of practical questions, and you can be clear about your intent on all of them without knowing anything about the law.

1. What is paid at booking, and what is that payment for.
2. What the remaining payments are and when they fall due.
3. What happens if the client cancels, and whether that changes as the date gets closer.
4. What happens if the date moves rather than the event being cancelled.
5. What happens if the scope shrinks after you have committed to buying.
6. What happens if you cannot perform.

The commercial logic behind most of those is the same and it is not complicated: as the date approaches you commit money and turn away other work, so a late cancellation costs you more than an early one. The legal question is whether the way you have written that down is enforceable, and that is where it stops being simple.

The general rule on a sum fixed in advance

A cancellation clause that names a sum is asking a court to accept a number the parties agreed before anybody knew what the loss would be. The law has a long standing framework for when that is acceptable, and it is the thing every florist cancellation clause is standing on whether or not its author knew.

Two things in that sentence do the work. The number has to bear a reasonable relationship to the harm, and a number that is too large is not merely reduced, it is void. That is the origin of the distinction between a liquidated damages clause and a penalty clause, and it is why the label on your paperwork is not what decides the question.

The evidence that this varies by state

It would be convenient to state one national rule. Here is a concrete demonstration that there is not one, using a single state's statute against the model code above.

Read those two together. In one state, the same clause is presumptively valid in a commercial contract and starts from void in a consumer one, with the difference turning on whether the purchase was for personal, family, or household purposes. A couple buying flowers for their own wedding is not obviously a commercial buyer.

We are citing this as evidence of variation, not as a statement about your contract, and certainly not as a statement about states other than the one named. A clause drafted against the model code and a clause drafted against a specific consumer protection statute are different documents, and a template that does not know which state it is in cannot have accounted for either.

Deposit, retainer, and why the word on the invoice is not the answer

Florists use several words for the money taken at booking, often interchangeably: deposit, retainer, booking fee, and nonrefundable deposit. They can describe different arrangements, and the pattern above is the reason the choice of word does not settle anything by itself.

The general framework in the sourced material asks whether the sum is a reasonable forecast of harm, not what the parties called it. Writing the word nonrefundable next to a figure is a statement of your intent, which is worth having in writing, and it is not the same thing as the figure being enforceable.

This is the specific point where copying somebody else's clause causes the most damage, because the copied wording carries the confidence of the original without any of its context.

What you can usefully do without a lawyer, and where to stop

There is real work you can do before an attorney is involved, and doing it first makes that conversation shorter and cheaper.

1. Write down what a cancellation at each stage actually costs you, in real terms: product already bought, orders that cannot be cancelled, dates turned away, hours already spent.
2. Keep the evidence that supports those figures, because a number you can substantiate is in a different position from a number you picked.
3. Write your intent in plain language, including what happens on a postponement rather than only on a cancellation.
4. Then take that to somebody licensed in your state and let them draft or review the clause.

Questions this chapter answers

Can a wedding florist keep a nonrefundable deposit?

That depends on your state and on the whole contract, and we cannot answer it. The general framework in the sources cited asks whether a sum fixed in advance is reasonable in light of the anticipated or actual harm, and treats an unreasonably large sum as a void penalty rather than reducing it. At least one state applies a stricter standard to consumer contracts than to commercial ones. Ask an attorney licensed where you work.

Does the law on cancellation clauses differ by state?

Yes, and the chapter demonstrates it with two named authorities: the Uniform Commercial Code baseline, which is a model code each state enacts its own version of, and California's statute, which places consumer contracts for personal, family, or household purposes under a different and stricter subdivision than commercial ones.

Sources

Every source below was read before it was cited. Where this chapter states a fact it did not derive, it points here.

1. 01U.C.C. Section 2-718, Liquidation or Limitation of Damages; DepositsCornell Law School Legal Information Institute. The Uniform Commercial Code text on liquidated damages in contracts for the sale of goods. The UCC is a model code: each state enacts its own version, and a state may vary the text, so this is the baseline rather than the law where you are.
2. 02California Civil Code Section 1671California Legislative Information, State of California. California's liquidated damages statute, including the subdivision that treats consumer contracts for personal, family, or household purposes under a stricter standard than commercial ones. California only, and cited here as evidence that states differ.