Iowa
Iowa enforces a kept deposit only as a reasonable estimate of the loss a no-show causes, judged against the anticipated or actual loss and how hard that loss is to prove. The Iowa Supreme Court’s rule is that damages agreed in advance must compensate for loss rather than punish for breach. It struck a $400-a-day charge on a contractor because nobody could say how the number was set, and in 2018 it struck a truck-driving school’s $1,900 “fine” that appeared only in a document the student signed after the loss. A deposit agreed when the client books, sized to what a no-show costs with a number the shop can explain, and never called a fine, is on firmer ground under that rule.
Does a non-refundable deposit hold up in Iowa?
The law’s word for a set sum agreed in advance is liquidated damages.
In Rohlin Construction Co. v. City of Hinton, the Iowa Supreme Court adopted Restatement (Second) of Contracts § 356(1): damages may be set in advance only at an amount reasonable in light of the anticipated or actual loss and the difficulty of proving it, and the harder the loss is to prove, the easier it is to show the amount is reasonable. It struck a $400-a-day clause that nobody could explain and that the engineer admitted was set to make the contractor aware the project had to be completed, because liquidated damages must compensate for loss rather than punish for breach. In State v. Roache, it held a truck-driving school’s $1,900 “fine” for a lost study guide an unenforceable penalty: the figure appeared only in a document signed after the loss, nothing showed it was reasonably related to the anticipated damages, and the school itself called it a fine.
“Damages for breach ... may be liquidated in the agreement but only at an amount that is reasonable in the light of the anticipated or actual loss caused by the breach and the difficulties of proof of loss. A term fixing unreasonably large liquidated damages is unenforceable on grounds of public policy as a penalty.” Rohlin Construction Co. v. City of Hinton, 476 N.W.2d 78 (Iowa 1991) · State v. Roache, 920 N.W.2d 93 (Iowa 2018)
Showing your refund policy
No general refund-policy disclosure statute was found. Iowa’s one refund statute, § 714.23, sets tuition refunds for for-profit postsecondary schools and reaches no other business; chapters 714 and 714H were searched and the Attorney General’s consumer pages read.
Body-art rules and money
Nothing about deposits, refunds, cancellations or client prices in Iowa’s tattooing rules, Iowa Admin. Code 481-492 (Practice of Tattooing), read in full. Every money word in them is regulatory: permit, inspection and late fees. The client record rule asks for no payment record.
This page summarizes public law in plain language, with the source each point comes from, read at the source on 2026-09-23. It is not legal advice.