A client books a caterer for an event and pays a deposit of $1,000. The caterer has already done initial work, such as menu planning and food preparation, which is valued at $400, when the event is canceled due to unforeseen circumstances. Who keeps the deposit, and how much?
The caterer and client split the $1,000 deposit equally, with each keeping $500.
The client receives a full refund of the $1,000 deposit.
The caterer keeps the entire $1,000 deposit, regardless of the value of work done.
The caterer keeps $400 of the deposit to cover the value of the work done and returns $600 to the client.