With snap lockdowns occurring across multiple states as Australia continues to grapple with the effects of COVID-19, travel interstate is uncertain. Many individuals have had to cancel their travel plans last minute without any certainty surrounding the possibility of re-booking or obtaining a refund. So what are your rights if your travel has been cancelled and your travel agent advises that you cannot get a refund? This article considers ways in which travellers can protect themselves against lost deposits and your rights to a refund.
The answer to this question is ultimately based on the terms and conditions of your contract with your travel agent or travel providers. In order to assess your ability to request a full refund, or whether you only receive a credit or postpone your travel plans to a date in the future, will depend upon the terms and conditions of your contract.
The clause to be aware of in your contract in these circumstances is referred to as a force majeure clause. Should your contract not contain a force majeure clause, the doctrine of frustration may apply. Below, we explain the components of a force majeure clause, and in the event your contract does not contain such a clause, circumstances where the doctrine of frustration may apply.
What is a force majeure clause?
A force majeure clause generally has the following features:
• A description of a force majeure event. This may be a general description that will trigger a force majeure event such as “an unreasonably foreseeable event” or an “event not anticipated by the parties at the time of signing”;
• The clause may list events that trigger a force majeure event (e.g. adverse weather, pandemics etc.);
• The clause requires one party to give notice to the other, that such a force majeure event has occurred, or will occur; and
• The clause allows for the termination of the Parties’ obligations under the contract as a result of the force majeure event.
If you are unsure whether or not your contract contains a force majeure clause, we encourage you to contact our office.
What is the doctrine of frustration?
A contract is considered to be frustrated if it is impossible to perform the contract due to events beyond the parties’ control. The phrase “beyond the parties’ control” is key to the doctrine of frustration. It is likely that COVID-19 would be considered an event “beyond the parties’ control”, particularly if a snap lockdown was to be imposed by a State Government. As this is likely the case, the contract may be frustrated.
The aim of the doctrine of frustration is to return the contracted parties to the position they would have been should the frustrated event not have occurred. This may, however, involve the travel agency retaining a portion of the monies paid to apply toward fees associated with managing the contract and arranging travel.
Can I claim on my insurance?
Should you not be successful in negotiating a refund with your travel agent or the travel provider, or if you are only able to recover a portion of the monies paid towards your travel, we recommend contacting your travel insurance agency regarding any remaining loss.
The ability to lodge a claim with your travel insurance provider will depend upon the terms and conditions of your insurance policy contained in the policy Product Disclosure Statement (PDS). Should you require assistance with interpreting the PDS, please contact our office.
What if I am still unsure of my rights?
We note the above circumstances may not relate to each and every scenario, or you may be confused whether the above relates to you. Although your options will largely depend on the terms of your contract with your travel agency, we recommend that you seek legal advice should your agency refuse to negotiate with you regarding a refund despite your rights outlined above. Should you need assistance, please do not hesitate to contact our Miss Bronte Strong on (03) 9304 9500.
Given the rapidly evolving circumstances surrounding COVID-19, additional information may affect this article. To see whether this information relates to you, we ask that you ring our office on (03) 9304 9500.
This article is intended only to provide a summary of the subject matter covered. It does not purport to be comprehensive or to render legal advice. No reader should act on the basis of any matter contained in this article without first obtaining specific professional advice.
DISCLAIMER: We accept no responsibility for any action taken after reading this article. It is intended as a guide only and is not a substitute for the expert legal advice you can get from De Marco Lawyers and other relevant experts.