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Travel Company Terms and Conditions: Don’t ‘Fly’ Without Them!

Travel Company Terms and Conditions: Don’t ‘Fly’ Without Them!

Exploring why every travel company, advisor or agent should have Terms and Conditions.

Do you think you could play a board game or recreational competitive sport without any instructions or rules? Trying to play a game like Monopoly or 8-Ball in billiards without instructions or rules is a challenge and a sure-fire way of ending up in a fight with your friends or family members.

Operating a travel business without formal written Terms and Conditions carries the same risk of unhappy players or participants, and a much greater risk of a dispute and someone ultimately being sued because of an undefined or undisclosed rule.

As the Program Administrator for the largest Travel Agents and Tour Operators Professional Liability program in the U.S., we have found, to our surprise, many businesses are operating without rules established between them and their clients. Some companies have basic Terms and Conditions, but many fail to address important common questions and basic pitfalls encountered in this industry. This can make a travel company responsible to pay for something when technically and legally they never were required.

Unfortunately, it happens all the time, and the list of potential mishaps can go on and on. That's why every travel company, advisor or agent should have Terms and Conditions.

What happens when there are no rules issued by the travel company or the Terms and Conditions are inadequate?

It often begins as a customer dispute, without any directions or guidance as to responsibility, expectations and how the problem may be resolved. These disputes can sometimes be resolved quickly when those involved are reasonably able to recognize what or who caused the problems. However, when neither party accepts responsibility for a problem, that's when it usually turns into a difficult situation.

Issues sometimes happen because a customer has made some type of error. Sometimes, it's a third-party, and sometimes travel agents and advisors make mistakes. There are other times when nobody is at fault and customers are unreasonable, have unrealistic expectations and expect their tour operator, travel advisor or travel agent to absorb all additional costs—regardless of whether they were in the wrong.

If there are no written rules, instructions or Terms and Conditions for a dispute to be governed by—and the parties are unable to resolve it amicably—a dispute can end up in court. If there's no statute or case law governing the disputed matter, it sometimes comes down to a judge's discretion. However, when a travel company has Terms and Conditions that provide rules or guidance with respect to a particular problem, a judge can utilize those Terms and Conditions as guidance when rendering a decision.

What types of provisions should be contained in Terms and Conditions?

Terms and Conditions can be quite detailed and extensive. They can also be shorter, more concise and less detailed.

Some companies may elect to have hundreds of paragraphs, touching on things as remote as: If a passenger becomes unruly, under the Terms and Conditions they have the right to refuse to allow that customer to continue with their tour; or that they won't be responsible if you're bitten by a tick. It's a matter of preference how much to have included, but the more that's spelled out, the less there is to argue about.

Most states will recognize that two parties to a contract/agreement are free to agree to or bargain for whatever terms they desire, as long as the agreement does not violate public policy. Certain terms and conditions will violate public policy when they are unreasonable or unconscionable.

Probably the first and most important items that any travel company should consider in their Terms and Conditions are Responsibility Statements and Disclaimers.

In the U.S., there's a unique body of law for travel agents and tour operators that holds if a tour operator or travel agent discloses to its customers that the services contracted for hotels, airlines, bus and limo transportation, cruises, day excursions, etc., are provided by independent third-party suppliers—which the travel agent or tour company, neither owns, operates or controls—these travel companies will not be liable for the negligent acts of one of those third parties.

Notwithstanding, a travel agent or tour operator could still be found liable, even if they have properly disclosed the independence of the suppliers in their Terms and Conditions. Two of the more common reasons a travel company may be found liable, despite this type of disclaimer are:

1. If it can be shown that a travel company was negligent in its selection of a vendor.

2. If a travel company failed to warn, within reason, of some common issue or hazard associated with the travel, activity or location a customer is visiting.

As a travel company, you should be cognizant that if you're operating without agreed upon rules for a given transaction, a court may decide that your company should bear the cost of such a loss, even though it was not your fault. Therefore, responsibility statements should disclaim responsibility for common items that could happen in any business transaction or relationship that may be caused by a person or entity that is not a party to the transaction.

Common examples of situations which can affect any type of transaction and should always be in business terms and conditions are strikes, civil commotion, political unrest, natural disasters, power shortages or failures, fires, inclement weather, labor disruptions, acts of terrorism or war, acts or restrictions by governmental agencies, bankruptcy and insolvencies, etc. These are all factors—beyond a travel company's control—which could result in loss.

Depending on the focus of the travel business, responsibility statements may also address bad things that could happen while at certain destinations, such as criminal acts, specific insect-borne illnesses that can be contracted, water levels rising or dropping that restrict passage by vessels, high altitude sickness, kidnapping and ransom, or the potential for attack by wild animals.

The following are also very important provisions to consider including in a travel company's terms and conditions. However, it's recommended to consult an attorney to review your Terms and Conditions to assess whether they're sufficient:

1. Payment Terms and Conditions.
2. Flight or Other Transportation Delays.
3. Recommendations for Trip Insurance.
4. Booking and Cancellation Provisions of Travel Suppliers and Vendors.
5. Visa and Passport Responsibilities.
6. Methods for Dispute Resolution.
7. Forum Selection and Venue Clauses.
8. Governing Law Provisions.

Are Signatures Required for Terms and Conditions to Be Binding?

Unsigned. Generally, courts will recognize and enforce Terms and Conditions (but not necessarily all Terms and Conditions), even if not signed by a customer, provided it can be demonstrated that the terms and conditions were received by a customer and were legible in terms of the font size and their placement. Terms and Conditions can be placed in brochures, with itineraries and invoices, online or any other reasonable placement that is communicated to a customer.

Signed Manually or By Computer. Generally, signed Terms and Conditions are not required in order to bind a customer; however, it's always better to have a signed or digitally acknowledged set of Terms and Conditions (often demonstrated by date, time and IP address recordings).

Minors and Terms and Conditions. Generally, Terms and Conditions supplied to the person making the reservations (the paying party) will be applicable to all members of the party, including children. However, when those Terms and Conditions potentially affect the rights of an injured minor, the courts may be less likely to enforce those terms against a minor. Nonetheless, when adventure activities are involved, and you are securing an assumption of liability and waiver or release of rights, you should obtain a parent's signature. While the waiver may not be enforceable, there is value in securing it anyway.

Terms and Conditions Should Receive Periodic Review. Often companies draft Terms and Conditions when they start their business and never review or revise them. Travel circumstances, industry practices and laws are constantly changing and evolving. It's always best to make sure you are up-to-date, so the courts don't deem important provisions unenforceable or to allow the absence of terms lead them to hold you responsible for someone else's misdeeds. It's our recommendation to consult a legal professional periodically to review your Terms and Conditions. An attorney that has experience in travel law may be in the best position to assess whether they're sufficient for your operation and enforceable as drafted.

Thorough and meaningful Terms and Conditions are one of the best ways to help protect your company and are very important. Don't fly without them!

Written by Kenneth F. Whitman, Esq., a Senior Program Manager at Aon Affinity Travel Practice.

Courtesy of Aon Affinity Travel Practice.

This article is provided for general informational purposes only and is not intended to provide individualized business, insurance or legal advice. You should discuss your individual circumstances thoroughly with your legal and other advisors before taking any action with regard to the subject matter of this article.


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