The airline, travel, and hotel industries have all suffered a wave of cancellations due to the coronavirus pandemic. Who should bear the brunt of these cancellations – the customer or the business?
Each case is different, but here are the general rules. Regarding fight cancellations: Plane ticket are almost always paid for in advance, and the airline industry is clearly regulated. Every ticket is purchased with explicit cancellation stipulations. Some tickets are refundable; some are not.
We have mentioned numerous times that explicit stipulations in a contract are binding. If the government imposes special regulations on account of the coronavirus, they are also binding – either because of dina d’malchusa dina or because whoever buys a ticket does so with the understanding that he is subject to the industry’s regulations (Rema, Choshen Mishpat 369:11).
Nonetheless, many airlines have relaxed their policies this month. Some provide refunds even for “non-refundable” tickets, others allow changing dates without penalty, while others allow you to cancel the charge through the bank and will not dispute the cancellation. It is permissible to pursue this last option since it is with the agreement of the airline.
Regarding hotel or apartment cancellations: This issue is more complicated. In some cases, we are dealing with only a down payment or deposit and a cancellation of the reservation; in others, with a refund of prepayment. In some cases, people rented an unspecified room from a hotel; in others, they rented a specific apartment from the landlord.
We would like to present three relevant cases in the Gemara:
The first case (Bava Metzia 76b) involves a person who hired workers for a job that became impossible due to circumstances beyond his control (e.g., he hired workers to dig a field or water it, but over night it rained and the field became flooded). If the employer had no reason to expect this development any more than the workers, neither side is at fault, and the employer does not have to pay due to the uncontrollable circumstances since he is in possession of the money (Choshen Mishpat 334:1-2).
Based on this case, Rishonim rule that a person who hired a tutor for a child who became unexpectedly sick does not have to pay, but if he prepaid, the tutor can keep the money. The same is true of a person who rented a house but died during the year or fled for some unexpected reason (Choshen Mishpat 334:1, 4).
The second case (Bava Metzia 79) involves a person who hired a ship to transport cargo, but the boat sank midway. Whichever party can still uphold his commitment has the upper hand. For example, if the agreement specified the ship but not the cargo, the shipper must refund any payment since the renter can provide other cargo whereas the shipper cannot provide the specified ship.
Conversely, if the agreement specified the cargo, but not the ship, the renter must pay, since the shipper can uphold his commitment with another ship whereas the renter cannot provide the specified cargo.
If both the ship and cargo were specified, whoever holds the money retains it since no one can uphold the agreement. If neither was specified, but the parties are not interested in shipping other cargo, they split the rental fee (Choshen Mishpat 311:2-5).
The third case (Bava Metzia 105b) involves a person who rented a field for a fixed amount of yield, but the crop was harmed by locust or withered. If the plague was widespread (makkas medinah), the renter is entitled to a reduction in the amount of produce he owes (Choshen Mishpat 322:1)
Based on this case, Rishonim rule that a renter of a house destroyed in a widespread fire is entitled to a refund (Rema, Choshen Mishpat 312:17).
B’ezras Hashem, next week we will address the application of these cases to hotel and apartment cancellations.