They want to be compensated with 100% revenue for 4 months prior to the wedding date, 50% for the 5th month and 20% for the 6th, should I cancel the banquet.
I asked my friends who are just recently married, and they said that they have similar clauses, but not this harsh. They said that 4 months is far too long to demand 100% revenue.
I mean 100% revenue means that they get the profit, plus the cost.
The whole idea is to compensate the hotel for the profit loss should I cancel. That is fair. However, what kind of cost does the hotel incur 4 months before the wedding? They won't have bought the food inventory and hired the temp staff, nor arranged the flowers. The only thing is the ballroom.
So, if I were to cancel for some unforseen reason, the hotel will be very well off since it won't incur much cost, but they will get compensation for the profit plus the cost they have not incurred.
There are some other clauses that would fall directly under the Unfair Contract Terms Act. Since these would be invalid anyway, I just left it in there if it pleases the hotel.
There's another clause that says that you are responsible for all damages caused by you or your guest. I had to caveat this one. Else, if say a waiter pours wine on your guest, your guest hits the waiter, and they end up fighting... then you must pay damages for your guest, the waiter, and the hotel.
I am still negotiating the terms. Hope they can be fair, because I really like the hotel.
I think people just sign these things without reading them. I think it is a big mistake. It is better to negotiate everything before you proceed with the hotel, and not after, so that there will be no dispute later.