Event deposits protected, but need not be refunded at once

New laws have been passed that will protect deposits for event-and tourism-related contracts from being forfeited if the booking is affected by the coronavirus outbreak.

But these deposits will not have to be refunded immediately in every case, as making such payments could impose a severe financial impact on some parties, said Law and Home Affairs Minister K. Shanmugam yesterday.

The Covid-19 (Temporary Measures) Act will cover events that were scheduled to be held on or after Feb 1, such as wedding banquets, business meetings or conferences. It also includes contracts for accommodation or entertainment related to tourism.

If an event cannot proceed due to the outbreak, any deposits forfeited will be restored once a claim has been lodged. Non-compliance would be an offence.

If parties end up in dispute, an assessor appointed by the Ministry of Law will decide on a “just and equitable” outcome based on the facts of each case, said Mr Shanmugam.

He gave the example of a man who booked a space for his daughter’s 21st birthday celebration that would have been held last Saturday.

The booking had been made early last month with more than 10 guests invited. But a March 24 ruling from the Government limited gatherings to 10 people.

The man wanted a refund or to postpone the event and approached the event space provider, but he was told that any postponement could be done only 30 days in advance, terms stated in their contract. “This is not reasonable,” said Mr Shanmugam.

Conversely, he noted a group of bridal studios had written a joint letter to him about “unreasonable couples” who asked for full refunds of their packages.

The studios had provided services to the couples for up to a year before the wedding date, with staggered payments made.

The studios noted that they were facing cash-flow issues and that it would be unfair to provide a full refund. Instead, they suggested working out a postponement for the couples with no penalties, said Mr Shanmugam, adding: “That is a reasonable equitable position.”

He noted that there are other solutions besides refunds. For example, the event could be postponed, with the deposit held back or it could be cancelled and the deposit repaid in full or partially, depending on the expenses incurred, over a period of time.

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