P'ninat Mishpat: Dividing Returns on Partially Cancelled Trip – part I | Beit Din Eretz Hemda - Gazit | Beit Midrash

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Case: The plaintiff (=pl), who lives in the US, signed up with and paid $4,140 to the defendant (=def), an Israeli company, for a trip to a third country (=dest), scheduled for Nov. 2023. The contract called for a 50% refund up to 21 days before the trip and no refund thereafter. After war broke out in Israel, def polled his clients to gauge the trip’s viability, and pl did not initially respond; the trip took place with only six participants. Eventually, pl cancelled her participation because the war complicated her travel plans and made her feel it was not the right time for a trip, but it was within 21 days. Def told pl he would try to get some refund from service suppliers in dest, and was able to offer pl $2,610. Pl tried to get her credit card company (=ccc) to cancel her payment to def, by arguing she did not receive the services. Def had requested she not do so, including because if ccc accepted her claim, it would hurt def’s standing with ccc. When ccc rejected her claim, pl asked def for the $2,610, but def rescinded his offer, arguing that she did not deserve his magnanimous gesture after she acted in a manner that could have damaged him.

Ruling: The first question is whether pl deserves a full refund because she did not get to go on the trip for understandable reasons. At first glance, since pl signed an agreement with refund conditions, she should be bound by them and receive no refund. However, we must consider whether that obligation is binding regarding the unexpected extenuating circumstance of war.

In general, if that which prevented the carrying out of an agreement came from both sides, the worker (here, def) does not receive pay, but if the employer could have avoided it (here, pl), she does pay. If a widespread problem prevented fulfillment from both sides, the Rama (Choshen Mishpat 321:1) rules that the promised payment is made. This seems to contradict the Rama’s ruling that when neither are to blame the worker does not get paid (ibid. 334:1). The Aruch Hashulchan (CM 334:10) uses the following distinction to reconcile the sources. If the worker is ready to do the work, but situations make it unfeasible for the employer to benefit, the worker deserves pay, whereas if the worker is also not able to do the work, he does not. In this case, def provided the service for whoever wanted, and therefore would be able to keep the pay. Although some argue on the Aruch Hashulchan, def would be able to hold on to the money in a case of a doubt.

In any case, there are other reasons pl cannot demand a refund. The main one is that pl, who lived in America, was not prevented from taking the trip, which did go on. While we appreciate her reasons not to, this is not reason that def should lose on his investment of resources into the trip. He protected himself from such loss with the refund conditions and recommended to his clients to protect themselves with travel insurance. Therefore, def’s efforts to obtain a partial refund for pl were beyond the letter of the law.

We continue next time with other elements of the ruling.