Case: The plaintiff (=pl) rented a wedding hall from the defendant (=def) for 27,000 shekels and paid in full a month before the wedding. Two days before the wedding, the groom’s father died, and the wedding was pushed off by shiva. The hall was booked for several weeks after shiva, and so the wedding was held elsewhere. Pl wants his deposit returned since he was not able to benefit from the reservation through no fault of his own. Def responds that since they were unable to find an alternative use of the hall, they should not have to lose under the circumstances.

Ruling: The Rama (Choshen Mishpat 334:1) discusses a case of one who rented a house for a set time and died. He cites two opinions on whether the deceased’s inheritors have to pay for the entire rental period or just for the time used and concludes that if the renter paid in full, the landlord does not have to give a refund.
The matter depends on the nature of a renter’s connection to the rented property. The Rashba (Shut III:78) says that if a homeowner rented out his home to someone for a set period and then the landlord’s own house fell down, the landlord cannot demand of the renter to vacate the home so he can use it because the renter has the status of a buyer during the time of the rental. According to the Rashba’s approach, if the renter were to die in the midst of the rental period, his estate would have to pay full rent, because the property was already "transferred" to him and the price for the whole time is due (see Shut HaRashba II:328).
The Maharam argues with the Rashba and says that the renter does not assume responsibility for the entire period. The Machaneh Ephrayim (Sechirut 5) raises an apparent contradiction within the Maharam, as the Mordechai says in his name that if one hired a teacher for his son and the teacher was unable to complete his responsibilities due to illness, the teacher is to be paid. It is as if the employer "acquired" the teacher for the time and it is his "acquisition" that was affected. The answer to the contradiction is that it is because, in the case of the teacher, we can "blame" the employer and suggest that had he not hired the teacher, he would not have gotten sick, that the employer is held financially responsible.
The Shach (334:2) rejects the Rashba, for he is overly reliant on the gemara’s statement that rental is like a sale for time. First, many say that this is only in regard to mispricing. Second, perhaps every day of rental is like a new sale. Third, even regarding a sale, one can back out if there is an extenuating circumstance about which the landlord did not stipulate the renter’s obligation. Nevertheless many opinions hold like the Rashba, and the Rama and Shach agree that if payment was made, it cannot be demanded back. There is also an opinion that the Rashba obligated payment only when the renter starting living there (whereas in this case, pl made no use of the hall), but that is apparently incorrect.
Due to the existence of opinions in each direction, compromise is appropriate. It is even more appropriate for def to give a partial refund considering that he gained by not having to set up and clean up the hall. Def was instructed to return to pl a third of the rental fee, which he did in good faith and spirit.