Frustration of a Contract
Frustration of a Contract and getting your deposit back from a business
Frustration of a contract happens when it is impossible to provide services stipulated under an executed contract. This year, many businesses have closed their shops due to COVID-19 and provincial regulations requiring certain types of businesses to cease operations. Some businesses have closed temporarily while others remain permanently closed. Understandably, this has posed issues for customers who have prepaid for services. This includes payment deposits and partial payment for services. When a business can no longer provide services pursuant to the terms and conditions of an executed contract, this is sometimes known as ‘frustration of a contract’. Frustration of a contract allows parties to terminate the contract following an inability of one party to perform.
From cancelled flights to postponed weddings and receptions, getting a refund for deposits previously paid have remained difficult for many.
Businesses are often reluctant to issue refunds as the money retained by the business from the customer is often been used in the business’ current operations. In many cases, businesses don’t expect to issue refunds; they expect that a voucher will be issued for later use and the service may be rendered at a later date.
What can I do to get my deposit back?
As it remains a difficult period for businesses and customers alike, flexibility often leads to amicable solutions. If you are able to reschedule your event at a later date, it might be worthwhile to negotiate with the business in order to determine whether it’s feasible to hold your event later.
In situations where it is not possible to reschedule an event, a refunded deposit may be warranted. You will want to pay close attention to the contract you signed with the venue. There are most often terms regarding deposits, refunds, and cancellations. Sometimes the venue may be flexible with their terms and conditions. If you do not understand certain terms and conditions of the contract, it is best to retain a lawyer for advice.
When asking for your deposit, it’s best to do so in written communication. Avoid requesting for a deposit over the phone as miscommunication may occur and you may want to refer back to the conversation at a later date.
How Should I ask for my deposit?
- Ensure that you state your request clearly, using bullet points if needed
- Make sure all your communications to the business are respectful and in written format
- Get a second person to proofread your email or letter before you send it to the establishment
- Follow-up with the establishment if you do not hear back from them within four business days.
- Attach the original (signed) contract with your request
What if the business is reluctant to give back my deposit?
In some situations, a letter may not suffice. If you are within your rights to receive your deposit back from the business, you may have to retain the assistance of a lawyer.
A lawyer may issue a demand letter for your deposit to the business or your lawyer may suggest additional action such as beginning litigation through small claims or through the Supreme Court.
Our lawyers are committed to providing the best solution for your particular matter and will guide you through your options, including outlining your chances of success. If you are a customer having difficulty getting your deposit back from a business, get in touch with us today. Call us today at 604-930-9578 or 1-800-930-9986.