Hi Reader!

Several years ago, I had a wedding photographer book time with me.

She had just gotten an email from the stepfather of a bride requesting a full refund of the amount they had paid for her services.

The back story was that a couple of days before the wedding, the bride canceled the wedding because she found out that the groom was cheating on her with her best friend. And the stepfather, who was an attorney, was pissed, and trying to get as much money back as possible.

Her contract called the payment an installment and said it was non-refundable, so she came to me to figure out how to reply to his email. It was just post-COVID, so she wasn’t in a position to refund the payment.

Long story short, I read his email and her contract, and agreed with him that she probably was going to have to refund them.

Why? Because her contract didn’t have a true liquidated damages clause to back up the “non-refundable installment”.

Instead of paying me to respond to his email, I encouraged her to hire me to refine her contract so that this wouldn’t happen again (and she did).

About a year later, she told me that she ended up in small claims court over this, and the judge agreed that she had to refund the money for this exact reason.

When you have a savvy and sophisticated client (or family member), this is the danger of not having a true liquidated damages clause in your contract.

While this might seem like legal hair-splitting, there's a reason that I always encourage both using the word installment and having a liquidated damages clause to back it up.

👉 Your action item: Check your contract for liquidated damages language, and if you don't have it there, add it.

Not sure what liquidated damages language looks like? I'm helping you spot it on LinkedIn and Facebook.

Chat soon,

P.S. Need a liquidated damages clause in your contract? I’m giving you the exact clause you need in your contract in next week’s workshop. And sharing how to stop having awkward money conversations with clients because your contract isn’t clear enough. Join me to refresh your contract with payment terms that protect your time and cash flow. Register for $39.​

5 contract payment terms that protect your time and cash flow

Making sure you have a valid non-refundable installment clause is just one of the payment terms that I recommend you include in your contract to protect your time and cash flow. Discover the other four in this week’s blog post and get access to a bonus contract audit checklist.

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