In light of the spread of the coronavirus, the Ministry of Foreign and European Affairs of the Slovak Republic urges citizens to consider whether travel to countries where the disease has been confirmed is necessary. On its website www.mzv.sk, it publishes information on the level of infection risk worldwide and, accordingly, specific recommendations for travel to individual countries. Several countries have declared a state of emergency and adopted strict travel restrictions to prevent the spread of COVID-19. A two-week quarantine may thus be mandated not only in the country you are planning to visit, but you will also be required to quarantine upon your return to Slovakia. Many of you are therefore facing the question of how to cancel your vacation. In the following article, we will outline the legal options for withdrawing from a travel contract, clarify the obligations related to the payment of compensation, and explain how to amend the travel contract if the travel agency is forced to substantially change the essential characteristics of the travel services and the scope of liability for providing the trip before the trip begins.
A. Withdrawal from a Package Travel Contract
Act No. 170/2018 Coll. on Package Tours, Related Tourism Services, Certain Conditions for Doing Business in Tourism, and on Amendments to Certain Acts (hereinafter referred to as the “Act”) sets forth in Section 21 three cases of possible withdrawal from a package tour contract.
1. The first case of possible withdrawal from the contract is governed by Section 21(1) of the Act, pursuant to which the traveler is entitled to withdraw from the travel contract at any time prior to the start of the trip. The traveler may do so without providing a reason. In this context, a cancellation fee may be agreed upon in the travel contract, the amount of which must take into account the time of withdrawal from the contract prior to the start of the trip, the anticipated reduction in costs resulting from the non-provision of travel services comprising the trip to the traveler, and the anticipated revenue from the resale of travel services. The amount of the cancellation fee need not be expressly specified in the contractual documents. If the amount of the cancellation fee is not expressly specified in the contract or in the general terms and conditions that form part of the contract, pursuant to Section 21(1), its amount is calculated as the price of the tour reduced by the sum of cost savings for unused travel services and income from the resale of travel services. The travel agency is obligated to provide you with a justification for the amount of the cancellation fee upon request.
In the event of an obligation to pay compensation (the so-called cancellation fee), it is possible to purchase trip cancellation insurance. The insurance covers trip cancellation, but generally also includes cancellation of airport fees or tickets for other modes of transport (bus/boat/train). The right to insurance benefits usually applies to medical reasons (such as illness, injury, or the death of the traveler or a close relative), loss of travel documents, and other events, depending on the specific terms and conditions of the insurance contract.
2. The second case of possible withdrawal from the contract is governed by Section 21(2) of the Act. Under this provision, the traveler is entitled to withdraw from the tour contract before the start of the tour if unavoidable and extraordinary circumstances arise at the destination or in its immediate vicinity that significantly affect the provision of the tour or the transportation of travelers to the destination.
In such a case, the traveler is entitled to withdraw from the contract without being required to pay a cancellation fee and is simultaneously entitled to a refund of all payments made for the tour.
In practice, there may be situations where travel agencies, in their general terms and conditions, mention only the traveler’s right to withdraw from the tour contract with the subsequent obligation to pay a cancellation fee. The right to withdraw from the tour contract without paying a cancellation fee in the event of the aforementioned unavoidable and extraordinary circumstances is either omitted from the general terms and conditions or includes a statement whereby the traveler waives such a right.
If the contractual documents do not address the right to withdraw from the travel contract pursuant to Section 21(2) of the Act at all, the traveler’s right remains intact, as it arises directly from the law under which the travel contract is concluded; consequently, the rights and obligations of the contracting parties that are not regulated or only partially regulated in the contract are governed by the relevant provisions of this law.
In light of the widespread contractual practice of travel agencies, which include statements in their contractual documents whereby the traveler waives the rights granted to them by law, we would like to remind you that a package tour contract is classified as a consumer contract. Under this contract, pursuant to Section 16(1) of the Act, the travel agency undertakes to arrange a tour for the traveler at the agreed price, and the traveler undertakes to pay the agreed price of the tour. According to Section 2(b) of the Act, a traveler is a natural person who enters into a travel contract, as well as a natural person to whom tourism services are to be provided under the concluded contract. The term “trader” is defined under Section 2(c) of the Act as a person who, when concluding and performing a package tour contract, acts within the scope of their business activities, and may be a travel agency, a tour operator, or a provider of tourism services. From the cited provisions in conjunction with Section 1(2)(c) of Act No. 170/2018 Coll. and Section 52 of the Civil Code, as amended (hereinafter also referred to as “
CC”), it follows that a package tour contract is a consumer contract and the provisions on consumer protection therefore apply to the traveler.
Pursuant to Section 53(1) of the Civil Code: “Consumer contracts may not contain provisions that cause a significant imbalance in the rights and obligations of the contracting parties to the detriment of the consumer (hereinafter referred to as an ‘unfair term’). This does not apply to contractual terms relating to the main subject matter of performance and the reasonableness of the price, provided that these contractual terms are expressed in a definite, clear, and comprehensible manner, or if the unfair terms were individually negotiated.” The legislator expressly stipulates that contractual terms with which the consumer had the opportunity to familiarize themselves prior to signing the contract cannot be considered individually negotiated if the consumer could not influence their content. This is a typical example of provisions contained in general terms and conditions with which the traveler may become acquainted, but whose content they cannot influence, and which become part of the travel contract based on an incorporation clause included in the contract.
In this context, it is therefore necessary to mention Section 54(1) of the Civil Code, which states: “Contract terms governed by a consumer contract may not deviate from this Act to the detriment of the consumer. In particular, the consumer may not waive in advance the rights granted to him or her by this Act or by special consumer protection regulations, or otherwise worsen his or her contractual position.” An equivalent of this legal protection is subsequently found in Section 27(2) of the Act, which states: “A passenger may not waive the rights granted to him or her by this Act. Contractual arrangements or statements by the passenger by which the passenger waives his or her rights under this Act, by which such rights are restricted, or by which this Act is circumvented, are invalid.”
It can thus be inferred from the above that, any statements by the traveler contained in the general terms and conditions that would exclude the right to withdraw from the package travel contract without paying a withdrawal fee in the event that, when unavoidable and extraordinary circumstances arise at the destination or in its immediate vicinity that significantly affect the provision of the tour or the transport of passengers (such as a two-week quarantine or the very risk of contracting the coronavirus as a disease of an epidemiological nature) cannot be considered valid. The traveler thus has the right to withdraw from the tour contract before the start of the tour without paying a cancellation fee and is simultaneously entitled to a refund of all payments made for the tour.
For the sake of completeness, we note that it is equally impermissible to impose a contractual penalty for withdrawing from the travel contract. A contractual penalty may only be agreed upon in connection with a breach of a contractual obligation. Withdrawal from the contract, however, is the exercise of a right that arises directly for the traveler under the law.
3. The third possible case of withdrawal from a travel contract is regulated in Section 21(5) of the Act and applies to travel contracts concluded outside a point of sale. In such a case, the traveler is entitled to withdraw from the travel contract without giving a reason and without the obligation to pay compensation within 14 days from the date of conclusion of the travel contract. However, the traveler’s right to withdraw from the contract does not apply to tours whose price is reduced due to their provision shortly after the conclusion of the tour contract and the exclusion of the traveler’s right to withdraw from the tour contract pursuant to the first sentence of Section 21(5) of the Act. In this case, the Act therefore expressly recognizes the possibility of excluding in the travel contract the traveler’s right to withdraw from the contract without giving a reason and without paying a withdrawal fee within 14 days from the date of conclusion of the contract.
Pursuant to Section 21(4) of the Act, the travel agency is obligated to refund to the traveler all payments received from the traveler or on the traveler’s behalf under the travel contract or in connection with it without delay, no later than 14 days from the date of receipt of the notice of withdrawal from the package travel contract or from the date of the travel agency’s withdrawal from the package travel contract.
B. Amendment of the Travel Contract
If, prior to the start of the trip, the travel agency is compelled to substantially alter any of the specified characteristics of the travel services (e.g., destination, itinerary, start and end dates of the tour, length of stay, type and category of transportation, etc.) or cannot meet the traveler’s specific requirements to which it has agreed, or proposes to increase the tour price by more than 8%, it shall propose an amendment to the tour contract to the traveler. Pursuant to Section 20(3), in such cases the tour operator is obligated to immediately inform the traveler in a clear, comprehensible, and unambiguous manner on a durable medium regarding
a) the proposed changes and their impact on the tour price,
b) the traveler’s right to accept the proposed changes within a specified reasonable period or to withdraw from the travel contract without paying a withdrawal fee,
c) the fact that if the traveler does not accept the proposed changes to the travel contract within the specified reasonable time, the contract shall terminate, and
d) the price of the alternative trip, if such an alternative trip is offered to the traveler.
Pursuant to Section 20(4) of the Act, the travel agency is entitled to offer a substitute tour to a traveler who has withdrawn from the tour contract due to non-acceptance of the proposed changes within the meaning of Section 20(3)(b), provided that it is of the same or higher quality than the original tour. If the traveler does not accept the offer of such a substitute tour, the travel agency is obligated to refund to the traveler all payments made by the traveler or on their behalf without delay, but no later than 14 days from the date of receipt of the notice of withdrawal from the tour contract. The provisions of Section 23 of the Act governing the right to compensation for damages shall apply mutatis mutandis.
If, as a result of a change to the tour contract or the acceptance of a substitute tour, a tour of lower quality or at a lower cost is to be provided, the traveler has, pursuant to Section 20(5) of the Act, the right to a reasonable reduction in the tour price.
C. Travel Agency Liability for the Provision of the Tour Act No. 170/2018 Coll. establishes in Section 22(1) the travel agency’s liability for breach of the tour contract, including in cases involving the obligations of other tourism service providers within the scope of the tour (hereinafter referred to as “breach of contractual obligation”). Pursuant to Section 23(2), a travel agency may be relieved of liability for damages only if it proves that the breach of the tour contract was caused by
a) the traveler,
b) a third party who is not a provider of tourism services provided as part of the tour, provided that the breach could not have been foreseen or averted, or
c) unavoidable and extraordinary circumstances.
In this regard, it can be noted that while it is understandable that travel agencies, given their business interests, are reluctant to cancel planned and paid-for tours, on the other hand, if there is a risk of coronavirus infection at the destination or in its immediate vicinity and this risk is known even before the start of the tour, the fact that the travel agency does not take the measures prescribed by law (amendment of the contract, withdrawal from the contract), even though, with the exercise of due professional care, it can be assumed that it will not be able to fulfill its obligation properly and on time, within the meaning of the cited provision of Section 23(2) of the Act, as well as the general duty of care, it will not be able to invoke the exculpatory ground of “ ‘unavoidable and extraordinary circumstances’ that would relieve her of liability, and she will be obligated to provide compensation for damages.
Pursuant to Section 23(1), which governs compensation for damages, in addition to the right to a reasonable discount, the right to reasonable compensation for property damage, as well as the right to reasonable compensation for non-property damage incurred as a result of a material breach of the travel contract for which the travel agency is liable. Pursuant to Section 23(4) of the Act, the damages to be paid by the travel agency may be limited in the travel contract only if such limitation does not apply to injury, intentionally caused damage, or damage caused by negligence, and if the compensation for damages does not amount to less than three times the total price of the trip.
