The cancellation fee (in Italian, penale di annullamento) is what you owe the caterer if you cancel the event after signing. Many contracts set rising penalties: a percentage of the total if you cancel months ahead, a higher one a few weeks before the date. Each caterer sets its own percentages.
It matters because for catering booked for a set date the 14-day withdrawal right does not apply: the only ways out are the ones in writing. Read the penalty together with what you have paid, an advance payment or a deposit, which have different consequences. Under the Italian Civil Code a manifestly excessive penalty can be reduced by a judge, but it is better to negotiate it first.
What to check
Read the time thresholds, the basis of calculation (total quoted or minimum guests) and what happens if the caterer cancels or in case of force majeure. The guide on what to check in the contract explains the general rules; for large amounts, professional advice is worth having.
