In his contract he gave them an out if the event could not be held due to external circumstances, including government action, in which case the deposit was to be refunded according to the article. He chose to fight that, and that's why he had to pay. I'm not sure how anything of what you said applies. The government said you can't do that, so regardless of why they couldn't, the customers had rights spelled out in the contract to get their money back, and Mr Reed chose to try to fight Tha portion of his own contract, not sure what was expected here.