Up to 40% Reduction in Cancellation Fees for Wedding Postponements Due to COVID-19 and Other Infectious Diseases

Fair Trade Commission Issues Administrative Notice on Consumer Dispute Resolution Standards for Wedding Industry

Exemption from Penalty Fees in Cases of Facility Closure or Suspension of Operations Making Contract Fulfillment Impossible

(Photo) [Image source=Yonhap News]

[Sejong=Asia Economy Reporter Joo Sang-don] In the future, if fulfilling a wedding contract itself becomes impossible due to the outbreak of infectious diseases such as the novel coronavirus infection (COVID-19), penalty fees will be exempted, and depending on the severity of the infection, penalty fees can be reduced by up to 40%.

The Fair Trade Commission announced that it has prepared a draft revision of the consumer dispute resolution standards in the wedding industry sector containing these provisions and will hold an administrative notice period until the 19th.

The consumer dispute resolution standards are regulations established and enforced by the Fair Trade Commission to facilitate smooth resolution of disputes that may arise between consumers and businesses. If there is no separate expression of intention regarding dispute resolution methods between the parties involved, these standards serve as the basis for agreement or recommendation to resolve disputes.

First, the Fair Trade Commission limited the scope of infectious diseases in the dispute resolution standards to Class 1 infectious diseases under the "Infectious Disease Prevention and Control Act." Class 1 infectious diseases are those with high fatality rates or a high risk of mass outbreaks, requiring immediate reporting upon occurrence or epidemic and a high level of isolation. These include COVID-19, Middle East Respiratory Syndrome (MERS), and Severe Acute Respiratory Syndrome (SARS).

The dispute resolution standards set out exemption reasons and penalty fee reduction reasons considering the risk level of infectious disease outbreaks, government measures, and the possibility of contract fulfillment.

First, if administrative orders such as facility closure or suspension of operations are issued, or if the wedding area or the user's residential area is declared a special disaster zone making contract fulfillment impossible, contract cancellation is allowed without penalty fees. For example, if a wedding contract is signed on October 1 of this year and the wedding is scheduled for March 30 next year, contract cancellation without penalty fees is possible if a facility closure order is issued for the wedding hall from March 27 for one week.

If administrative orders such as gathering restrictions are issued, or if it becomes difficult to fulfill the contract due to recommendations to comply with quarantine rules following a serious alert level, contract content can be changed without penalty fees or penalty fees can be reduced. Also, if the parties agree on postponing the wedding date and adjusting the minimum guaranteed number of guests, contract content can be changed without penalty fees. However, if no agreement is reached on contract changes, the contract can be canceled, and in this case, penalty fees may be reduced depending on the infection risk and government measures. Specifically, if contract fulfillment is considerably difficult due to administrative orders such as gathering restrictions or facility usage restrictions (equivalent to social distancing level 2), 40% of the penalty fee will be reduced. If it is difficult to fulfill the contract due to recommendations to comply with quarantine rules following a serious infectious disease crisis alert (equivalent to social distancing level 1), 20% of the penalty fee will be reduced.

Additionally, a new standard was established allowing consumers to cancel the contract at any time within 15 days from the wedding contract date to strengthen consumer protection. Also, in cases of contract cancellation due to consumer fault, the timing when consumers can receive a refund of the deposit (exemption timing) was adjusted from 3 months to 5 months before the scheduled wedding date.

A Fair Trade Commission official said, "We expect this revision to help resolve penalty fee disputes between prospective couples and businesses caused by large-scale infectious disease outbreaks," adding, "By establishing the consumer's right to withdraw from the contract and improving the penalty fee calculation method, consumer rights will be further strengthened, and more appropriate remedies will be provided to consumers."

The Fair Trade Commission plans to finalize and implement the revision after fully collecting opinions from stakeholders and related ministries during the administrative notice period and going through committee resolutions.

This content was produced with the assistance of AI translation services.