Through its Circular 004 of April 1, 2022, the Superintendence of Industry and Commerce laid the groundwork for the procedures and effectiveness of consumer protection rules and those regulations designed to protect entrepreneurs within the framework of the health and economic crisis caused by the COVID-19 pandemic, which directly affected the public entertainment industry, hindering the consumption of such shows. This led the national government to issue Decree 818 of 2020, which modifies the rights and obligations of the parties regarding cancellations, deadlines, suspensions, and the legal warranty for such events. However, this position, which we will analyze, presents certain legal situations that need to be mentioned.
Circular 004 of April 1, 2022 seeks to reconcile consumer protection regulations found in Law 1480 of 2011, as well as Decree 1074 of 2015 and Legislative Decree 818 of 2020, in the sense of allowing consumer legal warranty claims, through the refund of money, to be granted within the "State of Emergency" and up to one year after the termination of said state, but doing so in a very interesting way that forces us to review what rights the consumer has over the legal warranty in shows, what rights Legislative Decree 818 of 2020 granted to the entrepreneur, and the scope of the provision of the Superintendence of Industry and Commerce.
The legal warranty is understood as the consumer's right, and the entrepreneur's obligation, to obtain and pay for a service or good according to the characteristics that the entrepreneur informed or that meet their requirements and needs, as indicated by the Consumer Statute in its articles 7 and 11:
"ARTICLE 7. LEGAL WARRANTY. It is the obligation, under the terms of this law, of every producer and/or provider to answer for the quality, suitability, safety, and good condition and functioning of the products.
In the provision of services where the provider has an obligation of means, the warranty is given not by the result, but by the quality conditions in the provision of the service, according to the conditions established in mandatory regulations, in those offered, or in the ordinary and customary market conditions.
(...)
ARTICLE 11. ASPECTS INCLUDED IN THE LEGAL WARRANTY. The following obligations correspond to the legal warranty: (...) 3. In cases of service provision, when there is a breach, the consumer may choose to have the service provided under the conditions in which it was contracted or to receive a refund of the price paid."
Such warranty does not discriminate in which types of products or activities it may apply, and the consumer has, in general, several options to enforce such warranty, including repair of the good, replacement of the product, and refund of the money, among others.
Now, the effectiveness of said warranty is carried out through the regulations of Decree 1074 of 2015, in its chapter 32, which indicates that the legal warranty will be effective in the event of any nonconformity due to damages, or failure to perform the service, with its respective procedures, but in cases where repair, replacement, or substitution of the good is impossible, the full amount of money that the contracted service cost must be refunded, as expressed in articles 2.2.2.32.2.4 and 2.2.2.32.2.5, and this refund must be made 15 days after the consumer notifies such decision and presents the good or proof of service.
That said, and for the specific case, we have then that the nature of public or private shows, performing arts, or any other similar activity corresponds to the provision of an entertainment service carried out through an entrepreneur, who issues a bearer title that allows the consumer and holder to access said service. From this specific situation, we then have that it is not a good or product, it is not susceptible to repair, replacement, or substitution, and therefore the appropriate action under the legal warranty would be the refund of the money or, as an alternative, an agreement between the consumer and the entrepreneur that allows resolving the non-provision of the service by granting benefits or access to other public exhibition works. But the issue under discussion would be the refund of money that would operate within 15 days after notification of the decision by the consumer.
However, Decree 818 of 2020, in its article 5, mentions that in those circumstances of withdrawal, rescission, reimbursement, or refund that fall on the consumer's legal warranty regarding shows, the aforementioned period of 15 days will be extended until the end of the "State of Emergency" and one additional year. Now, in cases of cancellation or postponement of events that are consequences of measures taken by the national government for the sake of social welfare and isolation due to COVID-19, given that if the conditions for cancellation or postponement of the event are different from the above, the 15-day term will apply.
But then, how do we determine when one issue or another applies? To do so, we would have to determine what measures the government has taken that could allow the applicability of this suspension of terms or not. For example, we could think that a measure that allows the application of the rule would be the declaration and imposition of a curfew that prevents the circulation of consumers, also the prohibition of this type of event, and even the cancellation or postponement due to COVID-19 contagion of the main artist or the performing group, since ultimately the essence of the rules of the national government, Ministry of Health, mayors, and governors is the non-propagation, management, and control of COVID-19 contagion, a situation that could be supported by those rules, resolutions, or decrees issued by the competent authorities for the control and management of the pandemic.
However, if a cancellation or suspension of a show occurs due to commitments of the main artist or group, lack of sales, weather or public order situations, or any issue that departs from the national government's provisions for the prevention or management of COVID-19, it must be addressed according to the aforementioned procedure, guaranteeing the rights and principles embraced by the Consumer Statute and Decree 1074 of 2015. Therefore, the entrepreneur must take into account these provisions and circulars in order to correctly apply the refund procedure requested by consumers in cases of cancellation.
COMMERCIAL LAW.