Accommodation booked, itinerary perfectly planned, bags packed and you’re ready to go. You rush to the airport and the assistant behind the counter says, in the most polite manner, “I am sorry, but the flight is full”.
You begin to argue, but to no avail, as there is “unfortunately, nothing that can be done”. Sound familiar? For most of us, or someone we know, has been the victim of a scenario similar to the one played out above.
What are the rights and obligations that consumers and suppliers hold with respect to overbookings and cancellation of bookings?
The Consumer Protection Act 68 of 2008 (CPA) has come to the rescue of consumers who are unfortunate enough to be on the receiving end of an overbooking in respect of the supply of goods or services, whether it involves a flight, a training course or accommodation at a hotel.
The CPA sets out specific rules governing the overbooking and over-selling of goods or services.
Where a supplier is unable to supply the goods or services promised, the supplier must have the intention to supply the same or similar goods or services to the affected consumer.
If a supplier accepts a reservation, or makes a commitment to supply certain goods or services and then fails to supply the necessary goods or services, or similar goods or services of the same quality, the supplier is obliged to:
l Refund to the consumer the amount paid in respect of that commitment or reservation, together with interest at the prescribed rate (presently 15.5 percent per annum) from the date on which the amount was paid until the date of reimbursement.
l Compensate the consumer for costs directly incidental to the supplier’s breach of the contract.
If, however, a shortage of stock or capacity is due to circumstances beyond the control of the supplier, which does not include where the shortage results from a failure on the part of the supplier to “adequately and diligently carry out any ordinary or routine matter pertaining to the supplier's business”, and the supplier took reasonable steps to advise the consumer of the shortage of the stock or capacity as soon as it was possible to do so in the circumstances, then the supplier will not be required to compensate the consumer for the directly incidental costs associated with the failure to supply the goods or services concerned.
Taking this into account, it must be noted that if the supplier offered to supply or procure another person to supply the consumer with similar goods or services to meet the consumer’s requirements and the consumer accepted the offer and the supplier thereafter supplied or procured another person to supply those goods or services or if the consumer unreasonably refused that offer, the supplier will not be liable to refund the consumer or compensate the consumer for costs related to its breach of contract.
In this regard, if you were, for example, booked on a flight with airline X travelling from Joburg to Durban and, due to an overbooking, you lost your seat on that flight, airline X may procure the services of airline Y travelling to the same destination within a reasonable time period of airline X’s flight.
Depending on the circumstances of each case, should the consumer unreasonably refuse to board airline Y’s flight, airline X will not be liable to refund the consumer or pay the consumer the aforesaid costs.
The CPA provides the consumer with the right to cancel an advance booking, reservation or order for any goods or services to be supplied to the consumer.
Although this essentially provides the consumer with an unconditional mechanism to opt out of an advance booking, reservation or order, the CPA does ensure a certain amount of protection for the supplier of the goods or services which have been ordered or booked respectively.
When a booking is made in advance, the CPA allows for a reasonable deposit to be paid. In addition, if the consumer cancels the booking or reservation, a reasonable charge for cancellation of the order or reservation can be imposed.
In order to determine whether a charge in respect of a cancellation fee is fair and reasonable, the CPA requires the supplier to consider:
(a) the nature of the goods or services that were reserved or booked.
(b) the length of notice of cancellation provided by the consumer.
(c) the reasonable potential for the service provider, acting diligently, to find an alternative consumer between the time of receiving the cancellation notice and the time of the cancelled reservation.
(d) the general practice of the relevant industry.
For example, if a person cancels a plane ticket more than 10 days before the flight, a cancellation fee in the region of 50 percent of the full purchase price may be reasonable as there may still be sufficient time for a supplier to find an alternative consumer. This is contrasted with a cancellation that takes place on the morning of the flight where a cancellation fee of 100 percent of the purchase price is reasonable as, on such short notice, it will be nearly impossible to find an alternative consumer.
If a consumer is unable to honour any booking, order or reservation because of the death or hospitalisation of the person for whom or for whose benefit the booking, reservation or order was made, no cancellation fee may be imposed by a supplier in respect of that booking, reservation or order. - Saturday Star
l Monty is a partner, and Hurwitz a candidate attorney, at Eversheds