CORONAVIRUS & THE CARNIVAL NO-REFUND POLICY

1. On March 16, last the Gleaner published an article on the Carnival No-Refund Policy in light of the Covid-19 measures taken by the Government. The article included excerpts of statements made by me based on their request for comments. See link at http://jamaica-gleaner.com/article/entertainment/20200316/carnival-bands-no-refund-policy-legal-lawyer-goodwill-important

2. I have gotten a few questions and comments re the article so it’s important that I delve deeper than the article did, and clarify a few issues. As you may know, newspapers often take snippets of commentary for a story then add their own eye-catching headline. The definitive headline of the article (“No Refund Policy is Legal - lawyer”, was not my quote and I wouldn’t be that definitive in a situation that has so many relevant and sometimes conflicting considerations. The headline may suggest to some distressed patrons that there is no possibility for them to get a refund and nothing they can do. I don’t think that would be accurate. The legal issues are not black and white, and could have lawyers arguing for a while.

3. As stated, it is my view that the legal issues of Force Majeure , Frustration of Contract and also existing legislation may be relevant here. Force Majeure (ie. suspension or termination of the obligations of the parties to the contract due to certain uncontrollable events and what happens in that event) generally applies when it is detailed specifically in the contract. I haven’t seen the various contracts between carnival patrons and promoters but I understand that a Force Majeure Clause May have been included in the patrons online registration terms and conditions for a few of them. Let me know if you’ve seen that or otherwise.

4. It seems that when patrons “pay for carnival” they are paying for a combination of goods and services (costumes, goodie bag, food, drinks, parties, an experience), so it’s possible that a Court may break down the payment into separate contracts for each item you are to receive.

5. As it relates to SERVICES, Section 46 of the Consumer Protection Act DOES provide for refunds to a patron where a fee is paid for a “benefit” that isn’t received by the patron, through no fault of the patron. BUT if the patron agrees beforehand to pay the provider whether or not they end up receiving the benefit, then that would generally be upheld. For example, IF the promoters terms and conditions specified a detailed Force Majeure clause and that money paid by the patron would be non-refundable in the event of Force Majeure, and the patron agreed to that, then that may be upheld. On the other hand, obtaining a refund for GOODS, as opposed to services, under this Act appears to require that the goods received are defective. If not then it wouldn’t apply.

6. The Fair Competition Act provides that a merchant not disclosing their refund policy to customers may be considered misleading advertising and contrary to law. If the Carnival promoters did disclose this policy beforehand, (eg by displaying it on their website in FAQs clearly, etc) then the promoter would not be in breach of this section of the Act.

7. Even if there was no Force Majeure clause speaking to these circumstances, Contract Frustration May still be applicable. This may occur when, among other things, the law changes to prohibit performance of the contract (event permits being revoked due to Corona; state of emergency; government orders, all arguably fall under that) OR something unforeseen (Corona and the resulting government health decisions and orders) causes an excessive delay in performance. There is case law that gets into more detail.

8. There is local legislation (Law Reform Frustration of Contracts Act) that basically says if the patron (in this case) paid a deposit before the contract was frustrated and hadn’t yet received anything in exchange for the payment, the patron CAN recover that deposit. BUT, the legislation also says if the promoter (in this case) incurred expenses in performing their end of the contract before it was frustrated, then the promoter may recover those expenses, if the Court deems it fair in the circumstances. If the patrons deposit is greater than the promoters expenses, then the difference should be refunded to the patron. If not, the POSSIBLE effect is that it may bring the two parties right back to square one with the patron not getting back their deposit.

9. I believe good legal arguments may be made on behalf of both parties. I believe, however, that the quickest easiest most amicable way to resolve the issue is for the promoters to show goodwill and assist patrons who can’t attend in October, to recover their money.

10. The above is for general discussion purposes only and does not constitute legal advice. I always recommend that persons seek full legal advice privately if they choose and not simply go by a brief newspaper or social media headline or article.

11. Carnival patrons, promoters, legal colleagues - your views and experiences are welcome to help inform others. Knowledge is power.