State laws vary on reselling seats for interstate bus charter

By Mark Pestronk
Mark PestronkQ: A nonprofit whose travel we normally arrange has asked us to charter some buses for a trip to a casino in an adjoining state. Do we need any governmental licenses or permissions to resell the charter to the organization? What if we sell individual seats to the organization's members as part of a package including hotels? What are our liabilities in case of a bus crash? What can we do to minimize those liabilities?

A:
The business of chartering buses and reselling seats is largely unregulated. Anyone can do it without any governmental permission, with a few important exceptions.

If you sell seats to Californians, then you must be registered as a Seller of Travel under the California Seller of Travel Law if the price exceeds $300 "either separately or in conjunction with other travel services." If you are reselling the charter to the organization itself, such as a church, the church is not a "passenger," so you don't need to register in California to handle these charters.

The other states with active seller-of-travel registration laws -- Florida, Hawaii, Iowa and Washington -- have different criteria for who must register to sell bus charters. For example, Florida's law covers anyone who offers "prearranged travel," which includes bus transportation, and the law applies when you offer such travel to a "purchaser," which would cover either the nonprofit itself or its members that pay for seats.

Some states, such as Virginia, require licensing of "motor carrier brokers" located in the state or performing trips wholly within the state or from the state to another state. So you need to check out the laws of both the state where your agency is located and the state whose residents or organizations you are soliciting.

Your liability in case of a crash would be based on your agency's own negligence in selecting or recommending the bus operator. If you knew or had reason to know of the operator's poor safety record, inadequate insurance or lack of operating authority, a plaintiff's lawyer would try to hold your agency jointly responsible for the accident, along with the bus operator.

To prevent such an unfortunate outcome, follow the U.S. Department of Transportation's tips for checking out a bus operator's licensing, insurance and safety record at www.fmcsa.dot.gov (search for "Tips for Chartering a Bus"). If you follow those tips, I don't see how a judge or jury could possibly find your agency liable.

Of course, before you were held not liable, you would have incurred tens or hundreds of thousands of dollars in legal fees, so you might want to consider errors and omissions insurance, which will cover your legal fees regardless of whether you are held liable.

Appropriate disclaimers are also important. The nonprofit should sign a contract with your agency under which the organization acknowledges that you are not responsible for any supplier's acts or omissions. Regardless of whether you sell the charter to the organization itself or to the participants individually, each passenger ought to sign a simple disclaimer, as well. Sample disclaimer forms can be found at www.pestronk.com/free.  

Finally, under your contract with the bus operator, the latter should agree to indemnify you against all claims arising out of operation of the bus and pay your legal fees in defending any suit.

Mark Pestronk is a Washington-based lawyer specializing in travel law. To submit a question for Legal Briefs, email him at mark@pestronk.com. 
This page is protected by Copyright laws. Do Not Copy. Purchase Reprint
blog comments powered by Disqus

View Comment Guidelines

Please upgrade your Flash Player.
Please upgrade your Flash Player.

Travel Weekly Poll

Voices

  • Consumer media discover that travel agents do exist

    "Contrary to some thoughts, travel agents do exist ... We are usually able to get clients better prices, and we know we can see that clients have better experiences. And as our personal motto is: Our Service Travels With You."

    More»

TW Index: Most Active Stocks

Latest Top News:
Caribbean
Europe
Travel Weekly is on Facebook
Viewpoints For Travel Agents
Travel Weekly Topics