Mark Pestronk
Mark Pestronk

Q: If a cruise line or tour operator sends my agency a copy of its terms and conditions and we don't forward them to our client, is the client nevertheless bound by the terms and conditions? If so, then I don't understand the law because I thought that, to be bound by a contract, you had to have had an opportunity to read it and accept or reject it. What if we are acting as our own tour operator (instead of just a travel agent) by selling a package that we put together? In that case, is the client bound by the terms and conditions of all the suppliers we use?

A: According to court precedents, acceptance of terms and conditions by your agency binds your client just as though the client had received and accepted them. It doesn't matter whether you forward them to your client or whether your client ever sees them.

Under the law of agency, you are the client's agent in the sale of a cruise or tour, and you can therefore accept contract terms on your client's behalf. You do so by forwarding the client's deposit, receiving the supplier's terms and conditions and proceeding with the transaction.

In a federal case in Manhattan decided last year, Jones v. Ponant U.S. LLC, the key issue in the case was whether the consumer accepted Ponant's passenger contract clause stating that all litigation had to be brought in France. These clauses are known as "forum selection clauses." The judge ruled that the consumer was deemed to have accepted the cruise line's passenger contract when the cruise line sent the contract to the travel agency.

The court stated that "a travel agent is deemed to be the agent of the passenger on whose behalf he acts, and the passenger is accordingly charged with constructive knowledge of information in the travel agent's possession. ... Courts therefore routinely deem forum-selection clauses reasonably communicated to plaintiffs where the carrier reasonably communicated its existence."

For travel advisors, the key takeaway is that you have a legal duty to make sure that clients get a copy of the supplier's terms and conditions, or at least a link to them. If you fail to do so, clients will be bound anyway and then may blame you for losing their rights.

For example, if a cruise line's passenger contract states that it is not responsible for theft of jewelry in luggage transferred onto the ship by the line's employees and your client does not get a copy of the contract and the client's jewelry is stolen, the client could successfully sue your agency for negligently failing to forward the line's contract. It doesn't matter whether the client would ever have read the contract.

If your agency acts in the capacity of tour operator, it is no longer the client's agent but rather a supplier in its own right, so it cannot bind the client to any terms and conditions other than your own. 


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