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11/09/2014

Contracts for destination weddings depend on who's paying

Q: I am planning a destination wedding for a nice young couple and their families, bridesmaids, groomsmen and other friends. I have obtained a good group rate at a Caribbean resort for 20 rooms, and I will handle airline reservations and ground transfers, rolling them into per-person price. Do I contract with just the bride and groom, or do I need a contract with each traveler? What should the contracts provide for?

A: Destination weddings have become very popular in the last decade. Unfortunately, they have also become the source of many lawsuits because the agencies' contracts do not make each party's rights and obligations clear.

Mark Pestronk
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Which party or parties you should contract with depends on whom you can expect to pay for the packages you are putting together. For example, you can have a contract that places the entire financial burden on the father of the bride, as in a traditional, local wedding reception. Or the contract can be with the wedding couple, making them responsible for full payment for all the participants.

Most likely, however, the guests will be expected to pay for themselves. In that case, you need a contract with each guest, just as you would with any tour participant. These contracts can be called "participant's agreements" or just "terms and conditions," and they would spell out deposit, final payment and cancellation requirements.

You should have another contract with the bride and groom that, in effect, guarantees against nonpayment by a guest and also clearly spells out the details and costs of the wedding ceremony and reception.

The guests should pay you, not the bride and groom, in order to protect against embezzlement, which will leave your agency on the hook to suppliers and guests demanding refunds. When each guest pays you, you could credit the bride and groom's account, leaving them responsible only for unpaid rooms.

Aside from the details, one of the biggest problems of destination weddings is a price increase due to lower participation than the minimum required or due to cost increases imposed by suppliers. You need to make clear that price increases are possible.

If air transportation is a mandatory part of your package, you need to obey the U.S. Department of Transportation rule that requires you obtain the client's written (or recorded oral) consent (at sign-up) to any price increase after a deposit is taken. After final payment, you cannot increase the price unless it is for taxes.

Another big, potential source of litigation is cancellation: If the wedding is cancelled, what happens to the guests' payments? Unfortunately, many guests will expect a refund, so you need to specify that there will be no refunds for cancellations for any reason within a fixed number of days before the trip.

If you deal with a wholesaler, the wholesaler might require each guest to agree to the wholesaler's own terms and conditions. Remember that such terms do not protect you, and they might make it more likely that you will be sued because the wholesaler is protected by its terms and conditions.

Your participant's agreement should be signed by each participant 18 and older, if they are paying for their own travel. Otherwise, you can send the terms in an emailed itinerary.

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