Generally, when a person pays a deposit they enter into a legally enforceable contract with the other side. It is implied that they have accepted the deposit as security and as proof that the consumer wants to proceed with the contract. Do note that a contract can be verbal or implied, it does not have to be in writing for it to be valid or in place.
Unless the business subsequently commits a serious breach of contract, or there was a cancellation clause, the consumer would have no legal right to cancel the agreement and if they do so they will be acting in breach of contract and risk losing their deposit.
However, as this was a business, they will be subject to certain consumer rules and regulations. For example, you will have some protection under Schedule 2, Regulation 1(d) of the Unfair Terms in Consumer Contracts Regulations 1999. It states that if the agreement has been cancelled after a deposit has been placed you are entitled to have the deposit returned in full, unless the business has spent time, effort and money, in which case they can deduct reasonable expenses. Even if some expenses have been incurred, if these are subsequently recovered, for example by re-booking the date to someone else, the deposit should still be returned in full. It follows that a blanket non-refundable clause that entitles the business to keep the deposit in all circumstances is most likely going to be unfair and unlawful.
If you are having difficulties in recovering the deposit when you believe you are entitled to have it returned, advise the business that you will not hesitate reporting them to the Office of Fair Trading and, if necessary, pursue the matter further through the county court. Exerting such pressure could often work in changing their position in this matter.
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