1 April 2020
Guidance for businesses that have had to cancel bookings and are in the process of refunding customers
The UK Government has issued clear guidance that all businesses that are not providing essential services must close, unless they fall within one of the limited exemptions.
Tourism NI has published guidance for businesses within the leisure, tourism and hospitality sector have had to cancel bookings and are in the process of refunding their customers.
Check contract terms
If you need to cancel a reservation, the first step will be to check the relevant contract terms with regards to cancellation. Whether any refund is payable will be dependent upon a number of factors and will vary on a case by case basis.
In particular, the clauses in relation to breach of contract and Force Majeure events are likely to be relevant. See further advice on Commercial (Contracts, Force Majeure, Insurance).
If a booking is cancelled and the contract does not expressly provide for the ability to do this, then it is likely that in the absence of any force majeure or other such clause covering the situation, the contract is deemed to be breached. The result of this would be that the customer is likely to have a right to remedy. A refund is usually the most appropriate option in these circumstances. However, again it is important to carefully check the contract and to consider whether there are any appropriate limitation provisions. A well-drafted contract or set of terms and conditions should contain details of any caps or limits that will apply to claims under the contract.
The property owner may consider alternatives such as offering a voucher or rescheduling a booking, which may be a more convenient option for both parties. However, there may be circumstances where it would be impractical for a consumer to accept this and unless the contract deals with this point, they are entitled to request a refund.
The Consumer Rights Act 2015 sets out rules relating to the supply of services to customers, and it is more than likely to be considered unreasonable to expect a consumer to pay for a service which they have not received.
As a last resort, the consumer can try to contact their insurer if they have a policy in place.
First published 1 April 2020