Mark Pestronk
Q: In almost every cruise line's contract with our agency, there are clauses stating that we are not the agent of the cruise line and that we are the agent of the passenger. For example, the current Viking Preferred Supplier Agreement states, "Both parties agree that the travel agent is the agent of the passenger ...," and Viking's Advertising and Commission Policy, which is incorporated into the Preferred Supplier Agreement, states, "NO AUTHORIZED AGENTS. No Travel Agent shall represent itself as an authorized or preferred agent of Viking ...." I thought that a travel agent was a supplier's agent, by definition. So these clauses seem to turn our status on its head. What's the point of these clauses?
A: An "agent" is a person or legal entity that is authorized to act on behalf of another person, known as the principal, to create a legal relationship with a third party. The agent's actions within its authority legally bind the principal in transactions or agreements.
So contrary to what these agreements state, you are obviously authorized to sell for the cruise line, and you are also obviously able to bind the cruise line to a booking that you make in the GDS, on the cruise line's website or on third-party websites. In other words, you act as the cruise line's agent in exactly the same way you act as an agent for the airlines, hotels, resorts, car rental companies and tour operators.
The point of these "no agent" clauses seems to be to enable the cruise line to repudiate your erroneous advice to the client or your misleading advertising. It may also serve to enable the cruise line to cancel a passenger's booking if the agent does not remit payment to the cruise line.
Would these rights to repudiate hold up in court? I don't think so. If both parties have acted like they have an agency relationship, the law would recognize it as the reality, despite the recitation in the contract. Ironically, the cruise lines' contracts probably work against their pricing policies. As you know, the same contracts generally prohibit agencies from advertising or selling at prices lower than the lines' own public prices. Such contract terms are called "resale price maintenance" and may be illegal in contracts between companies not in an agency relationship.
On the other hand, as you probably know, principals such as travel suppliers of all kinds have the right to dictate pricing to their agents. So an agency that wished to challenge resale price maintenance could cite the contract clauses as evidence of illegality.
Incidentally, you are also sometimes the agent of the passenger, just as the Viking agreement provides. If the client authorizes you to make a booking, you are acting for, and binding, the client.
So you can be a dual agent if you can act for both parties to the transaction -- the buyer and the seller. Contrary to popular belief, being a dual agent does not necessarily present a conflict of interest. Each party has a different purpose and a different role for you.