In my last article, I spoke about the basics of contract law and how it applies to travel agents and independent contractors. In this article, I will discuss the obligations imposed by agent and third-party suppliers to the clients by contract, statutes, and common law. Statutes are created by Federal, State, and local bodies and can impose certain duties upon the agent and third parties that can affect the contract terms. Therefore, it is important to always have a severability clause in all contracts. The severability clause means that if one section of the contract is deemed invalid by law, the entire contract is not abrogated, and the rest of the terms and conditions remain valid. For example, certain States do not permit travel insurance to be automatically included in the travel package. The agent or tour company would only be affected in those States while the rest of the contract remains valid.
Common law in the United States is very basically what it says, legal principles and practice that have evolved over time and become commonly accepted. Common law is accepted throughout the United States. The basic concept of a contract; offer and acceptance, etc. is common law. Therefore, we can use the same contract throughout the United States, which is subject only to variations by State and local statutes. The concept of travel law principles of contract are effective throughout the U.S. With these principals in mind, we can discuss the common law obligations applicable to travel agents, independent contractors, and their third-party suppliers.
The concept of a travel agent is somewhat simplistic but not fully concise when applied by courts. The travel agent was usually the agent for the airline, hotel, and cruise line – which are considered third parties in today’s world. The agent was appointed by the airline and served to issue tickets. The idea that the agent was, or is, also the agent for the client has often been a difficult problem legalistically, in that the agent owes duties to two different parties and these interests may often conflict when trouble brews. This brings about the reason why it is essential that each travel agency and tour company have its own TERMS AND CONDITIONS STATEMENT. And why such Terms and Conditions are agreed to by the clients, whether it be by an online click method or electronic signature or standard signature.
Now we need to understand what some of the most important Terms and Conditions are necessary to a Travel Agency Contract:
The first and most important disclosure is that of the Agent/Agency acting as a mere agent for suppliers in selling travel related services and that it is not responsible for the acts, misrepresentations or faults of the third party suppliers. The only caveat imposed by common law on this obligation is that the travel agent or tour company must use a standard of care in choosing its suppliers. However, that standard is what is typical in the industry. This is also why it can be somewhat legally misleading to use the common phrase “Travel Counsellors.” While the phrase can be fine, courts will impose a higher standard of care than the mere term “agent” implies. The agent (counselor) needs to be careful that they stay within their accepted field and do not counsel on areas such as medical conditions, governmental unrest, financial status of a third party supplier or conditions of the hotel, bus, ship, etc. – unless they have carefully reviewed the supplier or experienced the product. (Fam trips being very useful).
Risks, Cancellation, and Insurance:
This is a rather long set of conditions which basically explain that the client agrees to accept all risks of travel from verifying documents to injuries and losses, cancellations, etc. Also, the client will agree to waive any responsibilities of the Agency outside of its specific control. The traveler is advised to purchase travel insurance and review the terms and conditions of the same. These clauses now need to contain Acts of God, Virus, Impossibility of Performance, Force Majeure waivers.
Jurisdiction, Venue, and ADR:
In order to protect the agency from the necessity of defending a lawsuit in a foreign country or even county, the jurisdiction should be stated that all matters are controlled by the laws of the U.S, and in the County and State of the venue of the travel agency. Further, any lawsuits must be brought in that venue. ADR, or Alternative Dispute Resolution, clauses assist the agency in that the client agrees to first submit to Mediation prior to filing a lawsuit and often Arbitration. Mediation allows the agency to discover the facts of the case and, in 80% of the cases, mediation will settle the dispute for a fraction of the cost of a court proceeding.
These Terms and Conditions are essential but not all encompassing and additional Terms and Conditions will be discussed and their application in succeeding articles. Our law firm offers a complete package of Terms and Conditions and additional necessary documents for travel agents under our “Travel Agent Tune Up Kit” which is more expressly described by sending us an email to Goreinternationallaw@gmail.com.
Laurence Gore has served in numerous capacities with the Florida Bar including the Real Estate, Probate and Trust Section and the International Law Section. He was chairman of the International Law Section and its representative to the International Bar Association. During his tenure he developed and led the first International Law Section Exchange Program to China and to Argentina leading to significant Bar affiliation agreements in both countries. He served as chairman and representative to the International Bar Association, OAS, and was founder of the Travel Law Committee.
He is currently a partner with Laurence D. Gore & Associates.