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Protecting Consumers by Formulating New Regulations for Restaurant Reservations and Catering Services

Date:2021-03-10
Source:Department of Consumer Protection

Existing standard contracts for restaurant reservations and catering services (such as traditional Taiwanese banquets) are not legally binding or are enforceable with only limited effectiveness, thus resulting in many consumer disputes. To strengthen the protection of consumers' rights and interests, the Executive Yuan's Department of Consumer Protection (hereinafter referred to as the DCP) has deliberated and approved thedraft of "Mandatory and Prohibitory Provisions to Be Included in Standard Contracts for Reservation and Catering (Taiwanese Banquet) Services" formulated by the Ministry of Health and Welfare (hereinafter referred to as the MOHW). Those provisions took effect on April 13 2021,following the announcement of the MOHW. .

The key points of this draft are as follows:

  1. Vendors are required to clearly mark items that are charged, as well as the price standards

To prevent vendors from collecting additional fees not previously agreed upon, the said standard contract shall specify any equipment, facilities and services that do or do not need additional charges. For example, whether there are any additional charges for beverages and how they are charged. All relevant information shall be revealed to consumers to avoid any possible disputes.

  1. Stipulating that deposits may not exceed 20% of the total fees

To prevent vendors from charging an excessive deposit, which would cause an unreasonable burden to consumers, the draft stipulates that deposits may not exceed 20% of the total fee.

  1. Stipulating the refund policy if the customer terminates the contract
    1. The earlier the customer notifies the vendor, the greater the amount of the deposit that can be refunded. To address the problems of too much variation in the requirements for refunds for the termination of contracts, in which many deposits are not returned at all, the draft stipulates the proportion of the deposit that should be refunded based on when the customer notifies the vendor of the termination of the contract, compared to the scheduled date of the banquet. For example, if the customer informs the vendor of the cancellation 180 days or more before the scheduled banquet, then 90% of the deposit shall be refunded to the customer. Moreover, the 10% of the deposit retained by the vendor may not exceed NT$10,000; any excess shall be returned to the customer.
    2. In case of a severe calamity: Should the customer, the key participant(s) of the banquet, or their relatives within two degrees of kinship suddenly encounter a severe calamity or pass away, which results in cancellation of the banquet, vendors may postpone the date of the banquet or refund 100% of the deposit in lieu of the aforesaid refund criteria. Additionally, the customer may also request alteration to the contract.
  2. Stipulating what vendors should do when breaching the contract

If matters attributable to vendors (such as fires caused by short circuits in kitchens and accepting more than one reservation in the same time slot) cause vendors to be unable to provide the service or unable to provide a complete service, vendors shall notify customers immediately. If the customer terminates the contract as a result, the vendor returns double the amount of the deposit.

  1. Stipulating the reservation service for guaranteed numbers of guests and other alternatives

The number of guests actually in attendance at a banquet is commonly less than the expected number, resulting in many empty seats. To prevent vendors from refusing to provide "buffer tables" by claiming to not want to waste prepared food ingredients, if the number of the customer's guests do not reach the number of guaranteed guests, then vendors may charge based on the guaranteed number of guests indicated in the contract. Additionally, customers may request vendors to provide "buffer tables" or provide goods or services of equivalent value to the unused seats after necessary expenses have been deducted, in order to protect the rights of both sides.

The DCP reminds consumers that they must pay close attention to the "3 Mores and 2 Nos" when they are booking catering or banquet services.

  1. "Look around more, ask around more, compare more" to confirm your needs, and then contact vendors. Consumers should read through the contract carefully and check whether the content conforms to the regulations before signing.
  2. Please do not rush to pay the deposit in order to obtain priority rights to use the venue, and do not make reservations at different vendors for the same time slot and then cancel the reservations; this will lead to losses from deposits.

Lastly, the DCP also reminds all vendors that the content of the service contract they provide must comply with the regulations of the "Mandatory and Prohibitory Provisions to Be Included in Standard Contracts for Reservation and Catering (Taiwanese Banquet) Services". Should the contract content not conform to the said provisions, the content shall be revised within the prescribed period. For vendors who do not revise the content within the prescribed time, the authority may impose a punishment in accordance with Article 56-1 of the Consumer Protection Act.