In response to numerous requests for regulation on pre-payments made in connection with the holding of events and other similar functions, the Department of Trade and Industry (DTI) issued a set of guidelines that allow for a full or partial refund of payments made for such.
Under Section 3 of Memorandum Circular No. 20-30 or the Guidelines on Refund of Payments Made for Events Affected by the State of Public Health Emergency, “payments received either as down payment/deposit for any personal or business/work-related event or function, the date of which falls during a declared community quarantine where restrictions, particularly social distancing directives are imposed, but which events or functions have to be canceled or scaled-down as a result thereof, shall, upon request and notice, be refunded fully or partially”.
The guidelines also state that the advance payment covers the use or occupancy of the leased premises or venue, the food to be catered during the event, and other related services such as rent of a vehicle or equipment to be used in such events.
Refund agreements
For canceled events or functions which are supposed to take place during the implementation of community quarantine, the parties may consider either one of the following options:
- Consume the amount paid at a later date, which shall be no longer one year from the lifting of the restrictions imposed by the government;
- Get the net of the amount paid after deducting relevant actual expenses incurred before the imposition of restrictions, with proof thereof; or
- Get back the full amount paid regardless of expenses incurred after the imposition of restrictions.
On the other hand, for scaled-down events or functions which should have taken place during the covered period, the parties have the following options;
- Consume the amount paid at a later date but not later than one year from the lifting of restrictions imposed by the government;
- Get a refund in such amount proportionate to the agreed scaled-down event or function after deducting relevant actual expenses incurred before the imposition of restrictions, with proof thereof; or
- Get a refund in such amount proportionate to the agreed scaled-down event or function regardless of expenses incurred after the imposition of restrictions.
However, the guidelines do not prevent a party from returning the full amount without deduction of relevant actual costs, in an act of goodwill, or make a full or partial refund on any pre-payment received, in act of liberality.
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