I reserved a motorhome in Iceland. On the invoice the cancellation policy was listed. I didn't pay the invoice and then cancelled the reservation 2 months prior to the starting date. I cancelled because i found out that it's not safe (due to weather) driving a motorhome in Iceland in November .All the campsites are closed and the laws changed recently that you now cannot park wherever you like. Their website did not display this information and they've sent me an invoice for 75% of the total which is 1246 euros or $1400!

I thought the cancellation policy was not effective until I actually paid the first invoice. I think it's a crime that they want that much money even I cancelled two months ahead of time.

I want to find out if I am legally responsible to pay it out? What are my options here?

  • 13
    I can't speak definitively for Iceland's laws, but typically contracts become enforceable once you agree to them, not just when you pay up. Chances are you'll need to consult a lawyer.
    – ceejayoz
    Sep 18 '16 at 13:19
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    Likely when you booked, the form included a little agree to the terms clause. The date you agreed sets everything in motion, not the date you pay.
    – user13044
    Sep 18 '16 at 13:56
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    You say that the cancellation policy was listed on the invoice? An invoice is generated only after making a contract, and the cancellation policy should have been part of the contract (usually part of th eterms and ocnditions) already ... Sep 18 '16 at 16:02
  • 3
    I'm voting to close this question as off-topic because it should be migrated to Law.SE.
    – A E
    Sep 18 '16 at 17:09
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    I'm voting to leave open as we have entertained similar questions before, and cancellation of reservations is an essential part of travel.
    – mts
    Sep 18 '16 at 17:38

From the way you described it, it looks like you agreed to a contract with specific terms, which include cancellation penalty. Unless the contract stated the penalty would only apply once you made your first payment, then you owe the cancellation fees, and thus yes, you are responsible to pay it. Paying them would of course be your first option.

Your second option is to negotiate. If the reason for your cancellation is the recent change in law (which happened AFTER you signed the contract), you may have some recourse. In this case you should reach out to them, and explain the situation. You would still likely have to pay some cancellation fee, but this way you can have it reduced.

And of course your third option is not to pay. If you did not give them the credit card, and they do not have physical presence in your country, their chance to collect it are rather low. This however does not invalidate the debt - for example, one possibility is that they can sue you in Iceland in your absence (if in your contract you agreed to Icelandic jurisdiction), and get the default judgment. This may be enforceable in your country, and would certainly apply if you ever visit Iceland again. Thus attempting to resolve it peacefully with both parties satisfied may be a better strategy in the long run.

This depends on the assumption that the contract you've agreed to contain the cancellation provision, requiring you to pay 75% of the total amount in case of cancellation. If it contain nothing, and the company just made up a number, the situation of course is different.

  • 14
    @Aganju Where do you see a recommendation? I don't see one.
    – Berwyn
    Sep 18 '16 at 16:29
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    @Aganju of course not paying is an option. Whether it is a sensible one depends. Frankly if I was in the OP's position (and somewhat surprising that they haven't secured this amount up front as a deposit) I'd be minded to investigate it. Sep 18 '16 at 17:02
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    @Aganju You must be using a rather weird dictionary, because by most definitions it certainly is an option. Possibly not a very good one and morally dubious, but depending on the circumstances a possibility.
    – Voo
    Sep 18 '16 at 18:08
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    @Aganju What is illegal? There is no concept of legal/illegal without reference to a country laws or international laws. AFAIK not paying in this case may be illegal in Iceland, but not in an unrelated state. Whether it is moral or immoral is an other matter.
    – Bakuriu
    Sep 18 '16 at 20:59
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    @Aganju: contract disputes, when one side does not act according to contract, have nothing to do with "illegal activity". They are covered by civil law, and are resolved in civil courts. This happens on daily basis. If you know countries where not performing according to contract by itself is considered "illegal activity", please let me know.
    – George Y.
    Sep 18 '16 at 23:50

Contracts are binding.

You accepted a contract, and no matter how outrageous the conditions are, you are bound by it. You cannot apply the american 'feel' that the law protects you from 'surprising' fine print; other countries have other laws, and especially this protection is mostly non-existent in Other parts of the world. You are expected to read what you sign before you sign.

In addition, consider their position - this is just an example, of course - imagine they had no motorhome available for your booking period, and now shipped one to iceland just to rent it to you. Now you don't want it, and they sit on the cost.

  • 9
    Iceland is EU, hence surprising T&C are invalid. Crf. europa.eu/youreurope/citizens/consumers/unfair-treatment/… On the one hand, cancellation fees by themselves can hardly be called surprising. Then again, 75% of the full rate when cancelling 2 months in advance seems unreasonably high to me (cf. item 5 of the above link) Sep 18 '16 at 15:56
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    the american 'feel' that the law protects you from 'surprising' fine print The what, now? Dunno where you got that impression, but American law most certainly does not protect you form surprising fine print. Sep 18 '16 at 16:53
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    @HagenvonEitzen Iceland is not in the EU. Sep 18 '16 at 21:32
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    "no matter how outrageous the conditions are, you are bound by it" That's not true. A contract can never bind you to do something illegal, for example. Sep 18 '16 at 21:33
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    @DavidRicherby: Iceland may not be part of the EU, but as an EEA member it's bound by EU Regulations. In particular, Consumer Protection is part of the first pillar of the EU which regulates trade, and it is fully in force in Iceland.
    – MSalters
    Sep 19 '16 at 1:03

Many of the other answers and comments are operating under the assumption that a binding contract has been made; it is not at all clear to me that this is correct. Some of the moralizing seems particularly uncalled for.

Typically (western common-law based) courts require some sort of reasonably tangible consideration to change hands on both sides in order for a contract to exist at all; clarifying this point is the reason why things are often sold for a dollar (or other token sum) rather than simply being given away.

In this case, I can't see where either party has received anything of value; the rental agent has received nothing from you (you did not pay the invoice), and it seems unlikely that a judge would consider that reserving an RV for you two months from now is of any value. (Given that this is an easily reversible decision)

Of course it is possible that Iceland has some sort of unique Viking vacation rental laws that you could run afoul of, but barring this I would strongly suspect that the rental agent is fishing for a sucker, and you should not pay.

  • Please explain what consideration the rental agent has received?
    – jkf
    Sep 18 '16 at 22:15
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    @jkf Consideration needs to be specified for the contract to be formed, but generally you don't have to exchange anything immediately just to form a contract - mutual promises to exchange in the future are enough. If you had to actually exchange goods on formation of the contract, that would make contracting for things in the future very difficult. (IANAL)
    – Paul
    Sep 18 '16 at 23:32
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    "Western common law" - that would be British common law. Most of Europe including Iceland does not use British common law.
    – MSalters
    Sep 19 '16 at 1:08
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    Wow, I am going down in flames here. My point is that nobody has taken the trouble to look into what the law might actually say about this in Iceland, and are leaving crazy answers and comments based on some weird moral code which would not fly in the courts of any country with which I am familiar. IANALE but part of the point in contractors taking deposits is getting some provable consideration out there on the part of the contractee, so they don't have to dance around the issue in case of a dispute. I personally would lose no sleep over telling this vendor to KMA, morally or legally.
    – jkf
    Sep 19 '16 at 2:45
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    @MSalters "British common law" would be "English common law". Scotland has its own legal system (which, coincidentally, does not include the concept of "consideration"). Sep 19 '16 at 7:53

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