South Korea

The travel contract penalty fee seems excessive.

15%
Max penalty pre-departure
10%
Max penalty day-of
7 days
Notice period
KRW 5M
Consumer claim cap
The Short Answer

Under South Korean law, travel contract penalty fees are capped at 15% of the total travel fee for cancellations made before departure, and must be reasonable and proportional to actual damages.

What the Law Says

South Korean consumer protection law strictly regulates penalty fees in travel contracts to prevent unfair terms imposed by travel agencies.

The Framework Act on Consumers and the Enforcement Decree of the Act on the Regulation of Terms and Conditions govern how travel agencies may impose cancellation penalties. These laws require that any penalty fee must reflect actual losses incurred—not punitive or deterrent amounts.

Travel agencies must disclose penalty rates clearly in writing before contract signing. If the penalty exceeds statutory limits or lacks proportionality to real damages (e.g., unrecoverable costs), it is deemed unfair and unenforceable.

Consumers may request a reduction or full refund if the penalty violates these standards—even after signing—because unfair terms are void under Korean law.

Statutory Text

In the case of cancellation of a travel contract by the traveler, the travel agency may charge a cancellation fee not exceeding 15 percent of the total travel fee if the cancellation is made more than seven days before the scheduled departure date.

— Enforcement Decree of the Act on the Regulation of Terms and Conditions, Art. 12-2 — Cancellation Fees for Travel Contracts
Statutory Text

If the cancellation occurs within seven days before departure, the cancellation fee shall not exceed 10 percent of the total travel fee.

— Enforcement Decree of the Act on the Regulation of Terms and Conditions, Art. 12-2 — Cancellation Fees for Travel Contracts
Statutory Text

Any clause imposing a cancellation fee exceeding the limits prescribed in Paragraph 1 or 2 shall be invalid.

— Enforcement Decree of the Act on the Regulation of Terms and Conditions, Art. 12-2 — Cancellation Fees for Travel Contracts

What to Do

1

Review your signed travel contract and compare the stated penalty with the legal caps (15% >7 days prior; 10% ≤7 days prior).

2

Contact the travel agency in writing, citing Article 12-2 of the Enforcement Decree and requesting adjustment or refund.

3

If unresolved, file a complaint with the Korea Consumer Agency (KCA) via www.consumer.go.kr or call 1372.

4

For disputes over KRW 5 million or less, use the KCA’s free mediation service—no lawyer required.

Sources

statuteEnforcement Decree of the Act on the Regulation of Terms and Conditions, Art. 12-2 — Cancellation Fees for Travel Contracts

Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.