Contract clause

Cancellation clause: a booking sample with fee bands

A cancellation clause sets what happens when a client or supplier cancels a booking or service before it is delivered: how much notice changes the outcome, what is refunded or kept, what the supplier owes if it cancels, and how cancellation is given. It must reflect real losses to stay clear of unfair terms and penalty rules.

A cancellation clause turns the question of who keeps the deposit into a table: the earlier the client cancels, the more comes back. For bookings like catering, photography and venues, the bands should track what the supplier genuinely loses, because a charge out of proportion to that loss can be void as an unfair term or unenforceable as a penalty.

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3 min read · Published

Sample clause

Written for catering contract between Tallowwood Kitchen, a fictional caterer, and a couple booking a 120 guest wedding reception.

Cancellation. (a) The Client may cancel by written notice to the Caterer. (b) If the Client cancels more than 90 days before the Event, the Caterer refunds the deposit less an administration fee of $600. (c) If the Client cancels between 90 and 30 days before the Event, the Caterer keeps the deposit, which reflects the bookings it has turned away for the date. (d) If the Client cancels within 30 days of the Event, the Client pays 50 per cent of the total price, less the deposit already paid, to cover food ordered and staff rostered. (e) If the Caterer cancels for any reason other than the Client's breach or an event beyond its control, it refunds everything paid within 7 days and will help the Client find a replacement caterer. (f) Nothing in this clause limits the Client's rights under the Australian Consumer Law.

Sample wording, not legal advice.

Variants

Venue hire with bond

Hall or venue hire, where a deposit secures the date and a separate bond covers damage.

If the Hirer cancels more than 90 days before the hire date, the deposit is refunded less $60. Between 30 and 90 days, the deposit is kept. The bond is always refunded in full if the hire does not take place.

Service provider who cannot attend

Photographers, DJs and celebrants, where the supplier's own illness or failure is the risk the client worries about.

If the Photographer cannot attend because of illness or emergency, the Photographer will arrange an equally experienced replacement approved by the Clients, or refund all fees paid if no replacement is acceptable.

Non refundable booking fee

A small fee that secures a date and covers booking work, clearly separate from the deposit and the price.

A booking fee of $250 is payable to hold the date and is not refundable, because it covers the work of planning the booking and holding the date. It is credited to the price if the booking goes ahead.

What to negotiate

The risk of leaving it out

Without a cancellation clause, a supplier whose client cancels may have to prove its actual loss to keep any of the deposit, while a client may be unsure whether anything comes back. The argument usually happens close to the event, when both sides are least willing to compromise, and ends up with consumer affairs or a tribunal.

Unfair terms and cancellation fees

Cancellation terms in standard form contracts with consumers and small businesses are tested under the unfair contract terms provisions of the Australian Consumer Law. Consumer Affairs Victoria notes that terms penalising a consumer for breaching or terminating a contract, or letting only one party cancel, can be unfair. Since November 2023, proposing an unfair term can attract penalties. Separately, a charge out of all proportion to a legitimate interest can be unenforceable as a penalty. Law checked on 21 October 2026. This page explains how the law works and is not legal advice.

The sample in numbers

The catering price is $14,400 for 120 guests at $120 each, with a deposit of $3,600. Cancelling 120 days out costs the $600 administration fee, so $3,000 comes back. Cancelling 60 days out costs the deposit, $3,600. Cancelling 14 days out costs half the price, $7,200, of which $3,600 is already paid as the deposit. Each band is tied in the clause to a reason the client can understand.

Postponement is different

Many clients do not want to cancel; they want to move the date. A cancellation clause should sit beside a postponement clause that lets a booking move once to a new date within a set time, carrying payments across. The postponement clause page covers that, and the photography example handles both in one table by notice period.

Where the clause sits in a generated document

Catering, photography, venue hire, DJ and event planning contracts all carry a cancellation clause. When asking the AI document generator for one, give the notice bands, what is refunded or kept in each, the reason for each band, the supplier's own cancellation terms and a statement that statutory rights are not limited.

Documents that carry this clause

Questions people ask

What is a cancellation clause?

It is the term in a booking or service contract that sets what happens if either side cancels before the service is delivered: the notice needed, what the client gets back or pays at each stage, and what the supplier owes if it cancels.

Can a business keep my deposit if I cancel?

It depends on the contract and on whether keeping it is fair. A deposit kept to cover a real loss, such as turning away other bookings, is generally accepted. Keeping a large deposit when the supplier lost nothing may be challenged as an unfair term or a penalty.

Is a non refundable deposit legal in Australia?

A non refundable deposit can be lawful if it is reasonable and reflects the supplier's genuine costs or losses. A term making a large payment non refundable in every case, regardless of loss, risks being unfair in a standard form contract with a consumer or small business.

What if the supplier cancels?

The contract should require a full refund, and many also require help finding a replacement. If the supplier fails to provide the service, the client also has rights under the Australian Consumer Law, including a refund for a major failure.

Does a cancellation clause cover COVID or weather?

Only if it says so or a force majeure clause applies. Many event contracts now deal separately with government orders and severe weather, often allowing postponement or a refund less costs incurred, rather than applying the ordinary cancellation bands. Check both clauses together.

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Sources

Written and checked by the OneCraft team. Last checked .