Legal Framework for Payments by parents

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WEDDING WIRE

Hi there! In this blog we are going to cover a real case that happened to one of the event planning businesses on Maroo.

Background

Earlier in 2023 this event planner met with a couple and agreed to work together on planning their wedding. The couple signed a very comprehensive contract that the planner spent a lot of time crafting and reviewing with their legal team. It is important to note that it was the bride who signed the contract which included a clause about a non-refundable nature of their payments. After signing the contract, the planner invoiced the couple via Maroo, and the payment link was shared with the mother of the bride who actually made the initial down payment of $7,500.

Problem

Fast forward, a few months down the line the bride was not happy with the progress being made around the planning and she notified the planner that they would like to cancel the contract and move on with another service provider. The planner reminded the couple about a non-refundable nature of the payments made. Without further communication, in a few days the planner received a chargeback on the initial payment, and all the funds were removed from their bank account with 20 days timeline to counter the dispute with the client's bank. Maroo has a dedicated Dispute & Chargeback team and we supported the planner in preparing all the evidence and communication to the client's bank, but after another 30 days from submitting, we received a negative response from the bank which upheld their initial decision.

What is more interesting in this situation is the reason and the basis why the client's bank did that. The bank claimed that the actual owner of the card who made the payment, was the mother of the bride, who didn't sign the actual contract and was not aware about the non-refundable nature of the expense.

Solution

Since this situation happened, we were exploring what can we do on Maroo side to help you protect your business. Immediate reaction was to introduce an additional checkbox at checkout which will require people to acknowledge that by making this payment on behalf of someone else, they acknowledge and uphold all the contractual obligations by this party to the end service provider, which is your business.

Second thing we are adding on Maroo side, is contract signature functionality, where every person who makes the payment, will have the contract in front of them and with the checkbox above, we will require people to acknowledge that they read and agreed with the payment terms indicated in the contract. But as we learnt, these solutions will work in some states, but not the others.

Which is why we wanted to spread the word among our business community and encourage you to talk to your legal consultant and create an additional section in your contract that will regulate these exact cases when someone else is making the payment on behalf of the person who actually signed the contract. In the end of the day, what you need to have is the signature of any person who will be paying, that they understand the payment terms of the contract prior to submitting their payment to you.

We hope this information will strengthen and protect your business. In any situation, be sure that Maroo has your back 🧡

P.S. If you have similar stories that you'd like us to share anonymously and that will benefit the wedding & events community, please submit them via the following form and our team will be in touch.

Alex Nikityuk
Aug 9, 2023
2 min read
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