Summer is the peak tourist season, and many consumers have booked flights, hotels or signed up for tour groups in advance, but the sudden outbreak of the new crown epidemic has disrupted many families' plans to travel during the summer vacation. So, for consumers who have already signed a travel contract, can they be changed or terminated due to the epidemic? And what are the implications? After the trip is suspended or impossible due to the epidemic, can the consumer's prepaid tour fee or air ticket, hotel and other expenses be refunded?
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Termination of contract
Because of the impact of the epidemic, many consumers' summer travel plans have had to be suspended. Cancellation of travel plans, withdrawal from the group, cancellation and other consumer disputes will increase significantly, which also makes the travel contract increase potential risks in the process of performance. In general, there are two types of termination of a contract:
First, the parties concerned reached a consensus to lift it. The Civil Code stipulates that the parties may terminate the contract by consensus. The difficulties in contract performance caused by the epidemic are multifaceted, including the difficulty of tourists and tour operators to determine the itinerary caused by the uncertain epidemic situation, the increase in travel costs caused by the increase in epidemic prevention measures, and the increase in travel risks directly caused by the epidemic, which make both parties to the contract have a certain willingness to terminate the contract.
The core issue at this time is how to bear the loss after the contract is terminated. Among such losses, the direct losses mainly include the costs of tickets, air tickets, and ground connections paid by the tour operator in the early stage. China is now responding quickly to the new crown epidemic, and the railway department and the civil aviation department have issued a notice on August 3 to introduce free refund measures during the epidemic period, which reduces some of the main losses of the contract termination and creates conditions for the contract to be terminated through negotiation.
The principle of rescission through negotiation shall be the principle of good faith and fairness stipulated in the Civil Code, and the two parties shall reasonably share the actual losses on the basis of considering the specific contract situation. Last year, the Supreme People's Court issued the Guiding Opinions on Several Issues Concerning the Proper Trial of Civil Cases Involving the COVID-19 Epidemic (I) (hereinafter referred to as the Guiding Opinions (I) in accordance with the Law, and then jointly issued the Notice on Properly Handling Issues Related to Disputes over Epidemic-related Tourism Contracts in accordance with the Law (hereinafter referred to as the Notice), which requires courts at all levels to actively guide the parties to negotiate and settle, share risks and tide over difficulties together. In the process of consultation between the two sides, if there is a difference of opinion, a third-party institution may also be introduced to participate in mediation through people's mediation, administrative mediation, judicial mediation and other channels. Institutions such as the People's Mediation Commission and the Court Pre-litigation Mediation have professional knowledge, understand the current policies, and have the ability to provide good legal services to the contracting parties. The relevant documents also require tourism administrative organs and courts to give full play to the role of service guarantee, adhere to the priority of mediation, and guide the parties to negotiate and settle.
The second is the unilateral termination of the contract due to force majeure. Article 563 of the Civil Code stipulates several circumstances in which a party may rescind a contract, including "the purpose of the contract cannot be achieved due to force majeure". It is generally believed that force majeure is an objective situation that cannot be foreseen, avoided and cannot be overcome. It should be noted that the Civil Code stipulates that the termination of the contract due to force majeure that leads to the inability to achieve the purpose of the contract is "the purpose of the contract cannot be achieved", not "force majeure". Force majeure sometimes only temporarily hinders the performance of the contract, sometimes affects the performance of part of the contract, these do not constitute a statutory condition for rescission of the contract, and the parties can only rescind the contract if the purpose of the contract cannot be achieved due to force majeure. Specific to the impact of the epidemic on the tourism contract, if there are still expected performance benefits for the parties to the contract, the epidemic should not constitute a force majeure for the performance of the tourism contract, and the parties cannot request rescission of the contract accordingly.
In practice, a party requesting rescission of a travel contract should produce evidence to prove that the epidemic situation or epidemic prevention and control measures have caused obstacles to its performance of the contract. For the tourist side, it may be that according to the requirements of epidemic prevention and control, it is in a high-risk area of the epidemic and can no longer travel according to the period agreed in the contract; for the tour operator, it may be that the main travel destination attractions have been closed and it is impossible to determine when the contracted itinerary will be completed conditionally. In this regard, the party terminating the contract should prove the existence of the relevant epidemic prevention policies and prove the application of the relevant policies by the party. Only in this way can the causal relationship between the force majeure caused by the epidemic and the inability to perform the contract be determined.
Article 565 of the Civil Code stipulates that if one of the parties claims to rescind the contract in accordance with the law, it shall notify the other party, and the contract shall be terminated when the notice reaches the other party. For the party intending to rescind the contract, if it is determined that the contract is to be rescinded, the other party should be notified as soon as possible, which is not only a necessary procedure for rescission of the contract, but also a responsibility of the rescissive party. Article 12 of the Notice stipulates that tour operators and tourists should promptly notify each other of the situation that they cannot perform their contracts due to the epidemic situation or epidemic prevention and control measures, so as to reduce the losses of the other party. If the tour operator or tourist fails to perform or fails to fulfill the obligation of derogation and notification in a timely manner, it shall bear the corresponding liability. From the perspective of the subject matter of the tourism contract, it is extremely seasonal, which is also the reason why it is particularly susceptible to being affected by the epidemic, which requires the contracting party to always uphold good faith and goodwill, communicate in a timely manner, and maximize benefits.
If the contract is terminated due to force majeure due to the epidemic, the terminating party shall not be deemed to be in breach of contract and shall not be liable for breach of contract, but shall not be exempt from any losses. The losses caused by the inability to perform the tour contract first include the non-refundable expenses that the tour operator has paid to the local operator or the performance assistant in the early stage, including refund fees, ground pick-up fees, etc.; secondly, the operating costs such as labor services paid by the tour operator for the performance of the contract, as well as the available benefits of the tour operator. These losses shall be apportioned between the parties to the contract in accordance with the principle of equity. According to Article 10 of the Notice, the non-refundable expenses paid to the ground operator or the performance assistant can be borne by the consumer, but the operator shall not claim against the tourist for the loss of operating costs and available benefits of other tour operators. This principle takes into account both the rights and interests of most tourists as consumers and the practical difficulties of tour operators. In practice, the tour operator should produce evidence to prove which expenses are non-refundable, which are often actually incurred in the early stage of contract performance, or have to be spent after the termination of the contract to prevent the expansion of losses. In addition, the tour operator should arrange a refund in a timely manner, and if the refund cannot be made in time due to objective reasons, it shall promptly explain to the tourist and issue a written commitment to the refund period. If there is no reasonable reason, the refund may be deliberately delayed, and the tourist may also be liable for interest loss.
Modification of contracts
As an emergency, the outbreak of the epidemic will indeed affect the normal performance of the contract. In the face of this objective situation, starting from the overall situation of protecting the legitimate rights and interests of the parties and serving economic and social development, we should adopt various methods to promote contract performance under the premise of effective prevention and control of the epidemic.
The Guiding Opinions (I) stipulate: "Where the epidemic situation or epidemic prevention and control measures only cause difficulties in the performance of the contract, the parties may renegotiate; where performance can continue, the people's court shall actively guide the parties to continue to perform." Where a party requests rescission of a contract on the grounds that it is difficult to perform the contract, the people's court will not support it. Where the continued performance of a contract is obviously unfair to one of the parties, and it requests a change in the time limit, method of performance, amount of price, etc., the people's court shall decide whether to support it in light of the actual circumstances of the case." This provision points out the basic principle for handling contract disputes related to the epidemic, that is, to save contracts that are difficult to perform as much as possible. Among them, the use of methods such as changing the terms of the contract is an important means to prevent the direct termination of contracts that are difficult to perform.
Article 533 stipulates that after the conclusion of the contract, the basic conditions of the contract have undergone major changes that are not commercial risks that the parties could not foresee at the time of conclusion of the contract, and if the continued performance of the contract is obviously unfair to one of the parties, the adversely affected parties may renegotiate with the other party; if the negotiation fails within a reasonable period of time, the parties may request the people's court or arbitration institution to modify or rescind the contract.
This is the principle of change of circumstances in contract law, and generally four conditions should be met at the same time: first, there are objective facts that make it difficult to perform the contract or the basis for contract formation; second, it is unpredictable and unattainable; third, the trigger event occurs during the effective existence of the contract; and fourth, the result of continued performance of the contract is obviously unfair or the purpose is not achieved. In the case of difficulties in the performance of tourism contracts caused by the epidemic, the rational use of this principle can help overcome the difficulties and reduce losses for both parties. This principle applies not only to situations where it is difficult to perform a contract that has not yet met the conditions for rescission of the contract due to force majeure, but also to situations where the conditions for rescission of the contract have been met but the adversely affected party has the intention to change the contract.
Both parties can reasonably change the content of the contract by postponing the performance of the contract and replacing it with other tourism products, which is also a more common contract change scheme. The Notice also specifically mentions that the transfer of rights and obligations in the travel contract to a third party can also be used as a solution to overcome difficulties in performance. This plan greatly broadens the content of contract changes, and the essence is the transfer of contractual rights and obligations, which is an important and feasible way to change the severity of the epidemic situation in various regions.
The contract continues to be performed
For contracts that are less affected by the epidemic or can continue to be performed after the change, in the case of meeting the government's epidemic prevention requirements, if it needs to be performed in the near future, we should also pay attention to the actual impact of the epidemic on travel activities.
The Tourism Law stipulates that tour operators shall ensure that the goods and services they provide meet the requirements for ensuring the safety of persons and property; when tourists purchase and receive tourism services, they shall truthfully inform the tour operators of personal health information related to tourism activities and abide by the safety warning provisions in tourism activities; tourists shall cooperate with the measures taken by the state to temporarily restrict tourism activities in response to major emergencies and the safety precautions and emergency response measures taken by relevant departments, institutions or tour operators. In the face of the uncertainty of the outbreak of the epidemic, tourists should fulfill the obligation of truthful notification and cooperate with relevant epidemic prevention requirements; tour operators should take necessary epidemic prevention measures, provide effective protective equipment, and formulate emergency plans. Both parties shall be responsible for ensuring the safety of personnel and the smooth performance of the contract.
Judge reminds
Pay attention to the special clause of contract termination
In practice, the parties often sign a tourism contract as a standard contract, and such contracts often have special provisions for the termination of the contract. For example, some tourism contracts may adopt the Group Domestic Tourism Contract (Model Text), jointly formulated by the former China National Tourism Administration and the State Administration for Industry and Commerce, article 14 of which stipulates: "Tourists and travel agencies may submit a written request to terminate the contract before the trip." If the termination of the contract is proposed more than 7 days before departure, the two parties shall not be liable for breach of contract. If the travel agency proposes to terminate the contract, the tour fee shall be refunded in full; if the tourist proposes to terminate the contract, if the tour expenses have been incurred, the travel expenses that have been incurred shall be deducted. The travel agency shall refund the tour fee to the tourist within 5 working days from the date of arrival of the notice of termination of the contract". This clause specifies the specific conditions for the termination of the contract in more detail, setting a 7-day period, because the tour operator has generally not yet started the specific implementation of the itinerary 7 days before the trip, and will not cause losses to both parties. This special clause follows industry practice and takes into account the interests of both parties to the contract, and if this clause exists in contracts affected by the epidemic, it may be considered for preferential application.
There are also some contracts that are standard contracts developed by tour operators and are aimed at unspecified consumers. As covid-19 has been around for more than a year, the relevant contracts may contain provisions for dealing with outbreaks. Such provisions should be treated strictly. Article 26 of China's Consumer Rights and Interests Protection Law stipulates that where business operators use standard terms in their business activities, they shall draw consumers' attention in a conspicuous manner to the quantity and quality of goods or services, prices or costs, performance periods and methods, safety precautions and risk warnings, after-sales service, civil liability, and other content that has a major interest to consumers, and explain them in accordance with consumers' requirements; business operators must not use standard terms, notices, statements, store notices, etc., to exclude or restrict consumer rights 3. Provisions that are unfair or unreasonable to consumers, such as reducing or exempting business operators from liability or increasing consumer liability, must not use standard terms and use technical means to force transactions; where standard terms, notices, statements, store notices, etc. contain the contents listed in the preceding paragraph, their contents are invalid. The Civil Code also has provisions that standard clauses cannot be the content of a contract without explanation. According to these, restricting the exercise of the consumer's right of rescission in the standard contract, arbitrarily stipulating the proportion of refunds that the consumer should bear for the termination of the contract, and stipulating that the business operator has the right to change the main terms of the contract during the epidemic situation will not be effective against the consumer.
(Author: Zhao Zhao The unit is the Fengtai District People's Court of Beijing)
Source: Qianlong Network