Bought business class ticket, but now agency wants to change it to economy
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My question is, is there any law outlining these kind of situations?
Yes. It's a rather large field of law called contract law. Specifically, you may want to look at “unilateral mistakes”.
If the travel agent cancels your ticket, your options are limited. In truth, your best bet is to move on, add the agent to your blacklist, and wait for the next sale.
If you do want to fight, then we have to look at exactly what you paid and whether it was a reasonable price. If you are trying to enforce a clear mistake, that isn't going to get you anywhere. No court in Europe is interested in upholding bargains made in bad faith.
Bangkok has very soft demand at the moment and it's easy enough to pick up business class tickets from about 1200 EUR round trip from certain points in Europe. If you paid substantially less than that, it is hard to see it as a reasonable fare. If you didn't, I'd advise you to buy new tickets from elsewhere and take their offer of cancellation.
If you really do want to try to enforce it, then you're probably better of going over to law.stackexchange.com for their opinion. Your credit card provider may be willing to assist you though, and in particular AmEx usually can solve these disputes in your favour quite quickly.
EC 261/2004 has an involuntary downgrade provision, which is 75% of the ticket price pro-rated for the fraction of the leg downgraded. But it will be an uphill fight to claim (especially if the airline believes it sold an economy ticket) and it would still require you to travel in economy class, which obviously is best avoided.
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