deposit-terms

---
name: deposit-terms
description: Writes the deposit and cancellation wording for a UK hospitality booking so the money is defensible if the customer disputes it, tests every clause against the Consumer Rights Act 2015 fairness rules and the CMA's published guidance, strikes the ones that would not survive, and shows the working behind every figure. Use before you start taking deposits, when a customer has challenged one, or when the wording on your booking page was copied from another venue.
---

# Take a deposit the customer accepts and the law allows

You give this the booking types you take deposits on, what it actually costs you when somebody cancels, the wording you use now and where a customer sees it. You get back deposit and cancellation wording written clause by clause, each figure worked from a cost you can show, every clause you already use marked kept, rewritten or struck with the rule that struck it, and the one page you can put in front of a customer who is arguing. It will not tell you a clause is enforceable, it will not set a percentage for you out of the air, and it will not write a term that keeps the customer's money when the venue is the party that cancelled.

## What it does

1. **Separate the three things owners call a deposit, because the law treats them differently.** A genuine deposit is a binding reservation, paid to hold a date. A prepayment is part of the price, paid early. A cancellation charge is compensation for a loss caused by the customer pulling out. A card pre-authorisation is none of these, and the CMA says so directly: deposits or pre-authorisations "which will be automatically refunded if not called upon would not be 'mandatory charges'" for price transparency purposes. Write down which of the four each of your bookings actually uses, in the owner's own words, before writing a word of wording. Most venue terms fail because they use the word deposit for all four and then apply the rule for one.

2. **Know the test the wording will be judged against, and quote it into the document.** Section 62(4) of the Consumer Rights Act 2015: "A term is unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer." Section 62(1): "An unfair term of a consumer contract is not binding on the consumer." That is the whole exposure. A term found unfair is not reduced or read down, it simply does not bind, and the money goes back. Put both sentences at the top of the working file so every clause below is written knowing what happens to it if it fails.

3. **Check whether the deposit escapes the fairness test at all, and assume it does not.** Section 64 excludes the main subject matter and the price from assessment, but only on conditions: "Subsection (1) excludes a term from an assessment under section 62 only if it is transparent and prominent." Transparent means "expressed in plain and intelligible language and (in the case of a written term) is legible". Prominent means "brought to the consumer's attention in such a way that an average consumer would be aware of the term", where an average consumer is "reasonably well-informed, observant and circumspect". And section 64(6) closes it: the exclusion "does not apply to a term of a contract listed in Part 1 of Schedule 2". Cancellation and forfeiture terms are in that Schedule, so they are assessable however clearly they are written. Treat every deposit clause as assessable and stop looking for a way round it.

4. **Test each clause against the three Schedule 2 paragraphs that kill deposit wording.** Paragraph 4 catches the one-sided term: one "permitting the trader to retain sums paid by the consumer where the consumer decides not to conclude or perform the contract, without providing for the consumer to receive compensation of an equivalent amount from the trader where the trader is the party cancelling the contract". Paragraph 5 catches the oversized one: requiring the consumer to "pay the trader a disproportionately high sum in compensation or for services which have not been supplied". Paragraph 6 catches the penalty for breach. Run every existing clause past all three and record which paragraph it fails on. If your terms say you keep the deposit when the customer cancels and say nothing about what happens when you cancel, paragraph 4 has already found it.

5. **Size a genuine deposit as a small percentage, and say what "genuine" is buying.** The CMA's position, in guidance updated on 22 July 2026, is specific: "A genuine deposit may legitimately be kept in full as long as it operates as a binding reservation and the trader makes clear to the consumer at the earliest opportunity that a deposit is required, and the precise circumstances in which it would be non-refundable. Those circumstances must be clear and narrow, so that the trader does not have wide discretion to retain the deposit. But such a deposit will not normally be more than a small percentage of the price. A larger prepayment is more likely to be unfair as it may amount to a disguised penalty." So: small, flagged at the earliest opportunity, narrow circumstances, no discretion. A deposit of half the function value described as non-refundable is not a deposit in this sense and should be rebuilt in step 6 as a cancellation scale instead.

6. **Build the cancellation charge as a dated sliding scale, each step costed from something you can show.** This is the shape the CMA endorses: "It may be acceptable for a contract to contain a sliding scale of termination or cancellation charges but there must be no circumstances in which they are likely to be disproportionate or punitive. Such a scale, if given appropriate prominence, can provide consumers with certainty and clarity as to their position if they need to cancel." In one reported case a 75 per cent charge was upheld on a specialised sailing venture, and the reasoning was about clarity and legitimate commercial interest rather than the size of the number: "It is shown not in small print but in a very clear form, namely a table of cancellation charges in ascending scale." Cost each step from real figures: stock ordered against the booking, agency staff committed, a room held off sale, and the chance of reselling the date at that notice. The charge must reflect "any ability of the business to mitigate (reduce) any loss following the cancellation, for instance by finding another customer". A Saturday in December cancelled in October resells; the same Saturday cancelled on the Thursday does not.

7. **Strike every clause that takes the money twice or hands the venue a discretion.** The CMA lists these as more likely to be unfair: claiming "all its costs and expenses, not just its net costs resulting directly from the breach", claiming "both its costs and any loss of profit where this would lead to being compensated twice over for the same loss", and "a term which, in combination with any other term in the contract, permits double recovery". Keeping a deposit and charging a cancellation fee that was calculated on the full value is double recovery. So is a per-head minimum spend that survives a cancellation alongside a percentage charge. Also strike any clause using "at the venue's discretion", "administration fee", "non-refundable in all circumstances" or the word indemnify, which the CMA says outright "should be avoided".

8. **Write the two clauses owners always leave out: what happens when the venue cancels, and what happens when nobody can perform.** Paragraph 4 requires the symmetry, so the wording must state what the customer gets if the venue cancels, and it must be a real remedy rather than a credit note. For events outside anyone's control, the CMA's position is that where a contract is frustrated "the consumer should be entitled to a swift, full refund of any prepayments and not required to make any further payments. This should include a refund of deposits or fees described as 'non-refundable'", and that traders "should not charge any administration or processing fee to provide the refund". Write that in, in plain words, before a customer finds it for you.

9. **Put the wording where the customer will actually meet it, and log the version and date.** Prominence is a placement question, not a font size question. The deposit amount, when it is taken, and the cancellation scale go on the booking page before payment, in the confirmation email and on the function contract, in the same words each time. The total price including any unavoidable charge goes with them: the CMA's price transparency guidance lists "mandatory cover or service charges at a restaurant" among charges that belong in the headline total. Then log the version number, the date it went live and where each copy sits. The term that binds a customer is the one in front of them on the day they booked, and a venue that cannot show which version that was has lost the argument before it starts.

## Then it checks

1. Every booking type is classified as deposit, prepayment, cancellation charge or card pre-authorisation, and the wording for each uses only the rules for that class.
2. Every genuine deposit is stated as a figure and as a percentage of the booking value, and the percentage is shown next to the sentence about a small percentage rather than asserted to be reasonable.
3. Every step of the cancellation scale names the cost it is built from, with the document or figure it came from, and shows the resale assumption at that notice period.
4. The terms state what the customer receives if the venue cancels, and state the refund position where the booking cannot go ahead through nobody's fault, including for sums described as non-refundable.
5. No clause allows the venue to keep a deposit and also charge a cancellation fee calculated on the same value, and no clause leaves the amount to the venue's discretion.
6. Every struck or rewritten clause carries the section or Schedule 2 paragraph number, or the CMA paragraph, that struck it, and the finished wording carries a version number, a date and the list of places it appears.

Any check fails: name it, redo that step once. Failed twice: say what is wrong and stop.

## Rules
- Public information only.
- Never invent a fact, a number or a quote.
- Anything sent in someone's name says whose name it is. Terms that go out over the venue's name are the owner's, and the owner signs them off before they go live.
- Never set a deposit percentage or a cancellation step that is not worked from a cost the owner can produce. A figure copied from another venue's website is the single most common reason a clause fails, because nobody can say what it was calculated from.
- Refuse to write a term that keeps the customer's money in full when the venue is the party cancelling, or a term making a substantial prepayment non-refundable whatever the circumstances, however the owner phrases the request. Schedule 2 paragraph 4 and the CMA's position on frustrated contracts both sit on it, and writing it puts a refund and an argument in the owner's future.
- Never tell the owner a clause is enforceable, fair, or that their terms comply. Fairness under section 62 is decided on all the circumstances by a court, and only a court decides it.
- Never write a term that attempts to exclude liability for death or personal injury. Schedule 2 paragraph 1 lists it and the Act deals with it separately.
- Never move a customer's existing booking onto new terms without their agreement. The terms that apply are the ones the customer saw when they booked.
- This output is a working document prepared for the owner's solicitor to check before it is published or used, and for the owner to check against their own costs. It applies published legislation and regulator guidance to draft wording; it is not legal advice and it is not a ruling that the wording is fair.

## Built from
- Consumer Rights Act 2015, section 62, https://www.legislation.gov.uk/ukpga/2015/15/section/62, read 16 September 2026: the definition of unfair in 62(4) and the consequence in 62(1), quoted in step 2.
- Consumer Rights Act 2015, section 64, https://www.legislation.gov.uk/ukpga/2015/15/section/64, read 16 September 2026: the transparent and prominent conditions and the Schedule 2 carve-out in 64(6), which is step 3.
- Consumer Rights Act 2015, Schedule 2 Part 1, https://www.legislation.gov.uk/ukpga/2015/15/schedule/2, read 16 September 2026: paragraphs 4, 5 and 6, which are the three tests in step 4, and paragraph 1 in the Rules.
- Competition and Markets Authority, "Unfair contract terms guidance" (CMA37), https://www.gov.uk/government/publications/unfair-contract-terms-cma37, published 31 July 2015, last updated 22 July 2026, read 16 September 2026: the genuine deposit passage at 6.62 in step 5, the sliding scale at 6.64 and the reported case at 6.66 and 6.67 in step 6, the double recovery and net costs list at 6.63 in step 7, and the frustrated contract refund position at 6.77 in step 8.
- Competition and Markets Authority, "How to write fair contracts: information for businesses", https://www.gov.uk/guidance/how-to-write-fair-contracts, published 23 March 2016, last updated 22 July 2026, read 16 September 2026: the plain-language and prominence instructions behind step 9, and the direction to set non-refundable amounts to reflect a genuine estimate of what the business will lose directly.
- Competition and Markets Authority, "Unfair commercial practices: price transparency" (CMA209), https://assets.publishing.service.gov.uk/media/691b10065a253e2c40d705d9/Price_transparency_-_CMA209_.pdf, 18 November 2025, read 16 September 2026: the treatment of refundable card pre-authorisations in footnote 35, used in step 1, and the inclusion of mandatory restaurant service charges in the total price, used in step 9.
- Competition and Markets Authority, "The coronavirus (COVID-19) pandemic, consumer contracts, cancellation and refunds", https://www.gov.uk/government/publications/cma-to-investigate-concerns-about-cancellation-policies-during-the-coronavirus-covid-19-pandemic/the-coronavirus-covid-19-pandemic-consumer-contracts-cancellation-and-refunds, last updated 28 August 2020, read 16 September 2026: the statement that terms letting a business provide no service but keep a consumer's money, including deposits and advance payments, are likely to be unfair, which supports step 8.

# deposit-terms

## You are given
One UK hospitality business. Its current booking terms exactly as a customer sees them, from the booking page, the confirmation email, the function contract and any printed card, each supplied as a separate file with the place it appears and the date it was captured. The list of booking types the business takes money on, such as table reservation, large party, function room, private dining, accommodation and event ticket, each with its typical value. The owner's costed figures for what a cancellation actually costs at each notice period: stock ordered, agency or extra staff committed, third party services booked, and the owner's own stated view of the chance of reselling that date at that notice, in their own words. The classification already made by Claude for each booking type, which is exactly one of `genuine deposit`, `prepayment`, `cancellation charge` or `card pre-authorisation`. The finished replacement wording, clause by clause, as Claude drafted it. And the rule citations Claude attached to each struck clause.

## Produce
Write into a `./deposit-terms-output/` folder:

1. `current-clauses.csv` with these columns in this order: `clause_ref`, `source_document`, `where_customer_sees_it`, `captured_on`, `clause_text_verbatim`, `booking_type`, `classification`, `status`, `rule_cited`. `clause_ref` is C001 upward. `classification` is exactly one of `genuine deposit`, `prepayment`, `cancellation charge`, `card pre-authorisation` or `not a money clause`. `status` is exactly one of `kept`, `rewritten` or `struck`. Every `struck` and every `rewritten` row carries a non-empty `rule_cited`.
2. `rule-tests.csv` with columns: `clause_ref`, `test`, `result`, `evidence_in_clause_verbatim`. `test` is exactly one of `s62 significant imbalance`, `s64 transparent`, `s64 prominent`, `Sch2 para 4 no symmetry on trader cancellation`, `Sch2 para 5 disproportionately high sum`, `Sch2 para 6 penalty for breach`, `double recovery`, `venue discretion`, `blanket non-refundable`. `result` is exactly `pass`, `fail` or `not applicable`. One row per clause per test, so every clause has nine rows.
3. `deposit-sizing.csv` with columns: `booking_type`, `typical_booking_value_gbp`, `deposit_gbp`, `deposit_percent_of_value`, `taken_at_stage`, `refundable_circumstances_verbatim`. `deposit_percent_of_value` is calculated, not supplied, and is shown to one decimal place.
4. `cancellation-scale.csv` with columns: `booking_type`, `notice_band`, `charge_percent`, `charge_gbp`, `cost_component`, `cost_gbp`, `evidence_source`, `resale_likelihood_owner_words`. One row per cost component per band, so a band built from three components has three rows. A band whose `charge_gbp` exceeds the sum of its `cost_gbp` rows is listed in `gaps.md` with the difference.
5. `new-wording.md` - the replacement clauses exactly as supplied by Claude, in the order supplied, under headings for each booking type, with a version number and the date. Nothing here is written, reworded, shortened or tidied by Codex.
6. `placement-log.csv` with columns: `version`, `date_live`, `location`, `wording_matches_master`, `captured_on`. One row per place a customer meets the terms. `wording_matches_master` is `yes` or `no`, compared character by character against `new-wording.md`.
7. `gaps.md` - a numbered list of: any booking type with no classification; any clause with fewer than nine rows in `rule-tests.csv`; any deposit above the percentage the owner was asked to justify with no justification supplied; any cancellation band whose charge exceeds its costed components; any band with no resale view in the owner's words; any location whose wording does not match the master; any clause containing `discretion`, `administration fee`, `non-refundable in all circumstances` or `indemnify`; and any booking type with no clause covering what happens if the venue cancels.

## Rules
- Codex classifies against the supplied definitions, measures, compares and records. It never writes a term, never rewords the owner's wording or Claude's drafting, never sets a percentage, and never decides whether a clause is fair.
- Never mark a `rule-tests.csv` row `pass` without quoting the words in the clause that make it pass into `evidence_in_clause_verbatim`. An empty evidence cell forces `not applicable` and a `gaps.md` entry.
- Never record a cancellation charge as supported unless every pound of it is matched to a costed component with an evidence source. Unsupported pounds are reported as the difference, never absorbed.
- Never calculate a deposit percentage from an assumed booking value. Where the owner supplied no typical value, the row is left blank and listed in `gaps.md`.
- Never carry a clause from an old version into the new wording, and never merge two versions of a clause into one.
- Compare placement wording character by character, including punctuation and capitalisation. A difference of one word is a `no`, because the term that binds a customer is the one they were shown.
- Never write, publish or send anything to a customer, a booking platform or a website. This produces files for the owner and the owner's solicitor.
- Use British English, GBP with the pound sign, and DD Month YYYY dates. No em dashes in any file you write, and any supplied text containing one is recorded verbatim and flagged in `gaps.md`.
- Every file ends with this line: this is a working document prepared for the owner's solicitor to check before the wording is published or used. It applies published legislation and regulator guidance to draft wording and is not legal advice or a ruling that the wording is fair.

## Return
The absolute path of every file written, the row count of each CSV, the number of clauses by classification and by status, the count of failed tests broken down by test name, every clause that failed Schedule 2 paragraph 4, the deposit percentage calculated for each booking type, the total charged against the total costed for every cancellation band with the difference in pounds, the count of placement locations whose wording does not match the master and which ones, the version number and date written to `new-wording.md`, and the `gaps.md` item count.