Real-Life Decision Making -- Solution
You hold them to the full amount -- after all, they did sign a contract.
This is not the real-life decision that facility operator Glenn Menard chose. When a group books space in an arena, they usually show or cancel the space within a reasonable amount of time. To sue a group for not sticking to the contract is not only in bad faith. It is also expensive.
If they don't have the money to give the arena in the first place, a lawyer is not going to be able to get the money. You'll end up with attorney fees and perhaps court costs on top of the original amount. It can be more expensive to take this path, says Menard.
Although in most instances, the arena facility operator does request a substantial deposit, Menard didn't because he was playing the good guy, he says. You have to live by your original decision -- not taking a full deposit -- even if it turns sour.
Facility operator Tom Conroy says the arena secures a non-refundable deposit, "which usually amounts to 50 percent of the rent. By canceling their date, they would lose this deposit."
Decisions of this nature will pop up continuously, says Conroy. You have to be prepared and know the ramifications of every move you make. He's had situations where a section of seating was closed because if people sat in these chairs, the view would be obstructed for the suite holders, directly behind them.
If the event sells out, you must decide whether to open this section or lose money and leave it closed. This is just one example of the many decisions that Conroy makes in one day.