Customer Refunds due to Coronavirus

We have received many questions from Temporary Structure Hirers who have received demands of a refund of “non-refundable” deposits from their customers following the customer cancelling their event.

Consumers are generally citing Competition and Markets Authority (CMA) Guidance from April or after referring to Citizens advice. Commercial Customers are generally citing “The Law Reform Act (Frustrated Contracts) 1943”.

The CMA guidance refers to “In some cases, where Government public health measures prevent a business from providing a service or the consumer from receiving it”.  The Law Reform Act (Frustrated Contracts) 1943, states that a refund is required if the performance of the contract has been made illegal, impossible or radically different from that contemplated by the parties at the time of the contract.

In both cases my understanding of the situation is that if the Temporary Structure Supplier is still able to supply the structure, and thereby performing the contract as intended, then generally there is no entitlement for a refund. This is not to say that the supplier might not choose to make a part or full refund depending on the circumstances, or as has happened in many cases, agree to postpone the booking.

Even where the supplier is unable to supply, then I believe they are able to retain reasonable incurred costs.

We hope this viewpoint is helpful.