I told them that I had reserved that date for them and I could not book that date with another client. They couldn't call two weeks before the session and expect to get a full refund on their deposit. I told them that $500 of their initial deposit was nonrefundable and I would send them a check for the rest. They were furious and saw no reason why I should not refund their entire deposit. Unfortunately, I did not have a clause in the contract to explain what would happen should they cancel. I ended up giving them the full refund on their deposit. It left a bad taste in my mouth and I likely won't do business with that company again. Lesson learned.

Now, I have a clear explanation in my contract with corporate clients that cover these issues. Here are some things you may want to consider when drafting your corporate contracts. It's all about protecting your interests!

Cancellation Window. If a client gives you plenty of notice, you may be able to find alternate sessions to make up the loss in income. Still, it's not a given. I recommend having staggered cancellation windows so that companies have an incentive to let me know as early as possible whether or not they have to cancel. For example, if a client cancels a seminar within 21 days of the event, they will lose a percentage of their deposit. If they cancel within 14 days, the percentage will be more substantial. Consider how long you realistically need to make other arrangements.

Expense Reimbursements. Say Client X has cancelled a seminar 22 days before it was scheduled. They will lose a portion of their deposit, but if you've already booked a flight or hotel, it should be their responsibility to pay. Keep careful track of any costs incurred on your part, and have your contract clearly state that any expenses related to their account will also be withdrawn from the deposit. (Note, by expenses, I mean major purchases like air travel. Don't charge them for every paper clip you used.) You may also consider that your travel expenses can sometimes cost more than the deposit itself. If it looks like you will have to shell out a lot of money for flights and hotel rooms, you may want to ask for a higher deposit to cover those costs. 

Cancellations on Your Part. Having to cancel a seminar is always a last resort. That said, emergencies happen. If you have to cancel due to an illness or personal emergency, alert the client as soon as possible. Don't burden them with too much information (they don't need to hear your drama), but apologize and offer alternatives. Can a colleague handle the seminar, or can it be moved to a later date? If not, suggest that you give the client a credit to be used towards a future seminar. You may also want to add a clause in your contract that allows you to deduct a small percentage of the deposit if the client refuses a credit.

By spelling out these things ahead of time, you will prevent misunderstandings down the road. Be sure that you and your client have a clear understanding of what the contract stipulates so that there are no unpleasant surprises should a cancellation be necessary.

See Juanita in action ....

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