Cancelling a wedding- legit fees?

I am making the unfortunate decision to cancel our wedding. The reception hall (Radisson) was booked months ago, and the wedding isn't until May 2011. No comments on 'should have waited' etc, may 2011 is filling up for everything where i live. Anyway losing the $1k deposit is understandable but they are also making us pay an extra $2000 for service and gratuity and tax based on how many people were supposed to attend. Is this acceptable? I dont understand how you can charge a gratuity and tax on a service that was never performed. I could understand if it were MUCH closer to the wedding date and the food was ordered, plans were in motion, etc. Alls we did was book the banquet room. Does anyone see a problem with this? Or am I just in the wrong? Please be sensitive, cancelling a wedding to someone I love very much is a horrible thing to go through... I just dont think its the right timing and much money has been invested and will be lost with other venders as well... not to mention the humiliation of telling our friends, family and coworkers. And the fact that it just plain hurts for both of us..... Thanks.