The Legal Impacts of COVID-19 in the Travel, Tourism and Hospitality Industry

TOUR ORGANISERS AND SUPPLIERS 85 cases as for example tenants of premises used as a nightclub, suspending the payment of the rent until the premises are allowed to reopen18. 5. APPLICATION OF THE DOCTRINE OF “FRUSTRATION OF PURPOSE” OR “DISCONTINUATION OF THE BASIS OF THE TRANSACTION” IN VARIOUS CASE SCENARIOS RELATED TO THE COVID-19 PANDEMIC 5.1. Destination affected by a high infection rate and/or a lockdown of public life In a scenario where the destination is affected by a high infection rate and/or a lockdown of public life whereas the carriage to that destination remains possible, the impact on the hotel reservation contract between the package organiser and the hotel operator on the one hand and on the contract of carriage between the organiser and an air carrier on the other hand will be different. As far as the hotel reservation contract is regarded, it can be argued that a precondition of the contract that was taken for granted by both parties was the provision of accommodation to tourists for leisure purposes. If, because of high infection rates and/or a lockdown of public life, any leisure activities become impossible or at least unreasonable it could be considered as a frustration of purpose according to the doctrine and the organiser may have a chance to claim back his payments to the hotel operator or defend himself against a claim brought forward by the hotel operator. A bit more difficult is a situation when public life is still possible but expected to be closed down during the period of reservation. In such cases, an objective probability will be required in order to to justify a lapse of the basis of the contract. Given the multiple factors that are influencing the spreading of the pandemic and the measures taken by governments to protect the health of the citizens it does not seem reasonable to require a particular percentage of probability. However, a high degree of probability should be demonstrated in any case. As soon as a hotel becomes subject to an operation ban it is clear that the hotel operator is not capable anymore to provide the contractual services and therefore the organiser is entitled to terminate the contract due to the impossibility of providing the service. 18 Auto del Juzgado de Primera Instancia No. 81 de Madrid, 447/2020 de 25 Sep. 2020, Proc. 473/2020

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