The COVID-19 crisis has reached global proportions and we are all feeling the fallout. Many in the photo industry are having to apply for small business loans or shutter their studios completely and file for unemployment.

And with restrictions on gatherings of more than ten people in almost every jurisdiction imaginable, including foreign countries, wedding and event photographers are being hit especially hard.

The thing to know right now to prepare for the fallout is, your clients are going to cancel (if they haven’t already), and they are going to want their deposits back. It’s up to you whether you refund their deposits—and given the financial insecurity looming for the next several months, it is reasonable to want to keep them—but most importantly, it’s up to you to have a handle on how you approach this crisis. Here are three things you can do to prepare and stay viable in your business.

[See our COVID-19 resource page for business information and creative inspiration that will help you rise to the occasion.]

1. Read your contract—especially all currently active contracts.

Look especially in your “Retainer” section, if you have one, or wherever your contract discusses your deposit, booking fee or other non-refundable fees you charge in order to save the date.

Read these carefully. Is the retainer specifically defined as non-refundable? Is it specifically defined as non-refundable in all circumstances, including “acts of God” or other events that prevent performance of your duties?

Look through your sections on cancellation and limits of liability. Does your contract say something about what happens during “acts of God” or other force majeure situations? Many contracts will say that all monies paid will be refunded in such a circumstance. Does your contract specifically exclude your retainer from these refunds?

None of these things necessarily mean that you will have to return your retainer, but every time your contract doesn’t specifically state that you keep your retainer under all circumstances, it’s easier for a client to claim that you must refund the retainer. 

2. Prepare by having a plan for rescheduling and cancellations.

Now that you know what your contract says, how willing are you to deviate from it in order to maintain good relationships with your clients? Many of your clients will want their deposit back. Even if your contract is iron-tight, are you willing to give them a whole or partial refund in light of the extraordinary circumstances? Such a sacrifice may be necessary to keep yourself in your clients’ good graces, and if you decide that it is, decide on a plan for what you’re willing to return, draft a policy and stick to it.

It’s also wise to consider being as flexible as possible regarding rescheduling. Current shelter-in-place orders, travel restrictions, and restrictions on gatherings of large groups will likely have expiration dates, but news reports suggest that this year may have several waves of similar travel restrictions and quarantine orders as the virus ebbs and flows.

Be prepared for your clients’ newly chosen dates to also be cancelled due to future regulations regarding COVID-19, and think about whether you are willing to let clients reschedule more than once. 

3. Brace yourself and make financial preparations.

Even if your contract allows you to keep your deposit in any circumstance, a court may find such a term to be unconscionable in light of the extraordinary circumstances at work and may order you to refund the deposit. A good lawyer can fight tooth-and-nail for you, but at the end of the day, a court’s decision is the law, and thus far we have fairly little guidance about how courts will rule regarding the COVID-19 pandemic and whether it releases parties from their contracts. It is always wise to prepare for the worst. 

There will inevitably be further complications that arise from the coronavirus pandemic, and the issues are likely to be litigated for months and years afterward. Stay on your toes, stay plugged into updates on regulations and state orders, do your best to keep as much liquidity as you can in your business—although we all know how difficult that will be. Most importantly, keep in contact with an attorney you trust.

Aaron M. Arce Stark is a lawyer for artists and entrepreneurs. Learn more about his law firm, Arce Stark & Haskell LLP, at ashlawllp.com.

This article is for informational purposes only. Contact a lawyer for legal advice.