Mark Pestronk
Q: Like most corporate agencies these days, a very large portion of our bookings are made by client employees using a leading online booking engine. After several years of working well, the engine has functioned poorly or not at all for the past few weeks. We have complained to the vendor, but we have received nothing except promises that they are going to repair the problems as soon as possible. Meanwhile, at least one important corporate client has threatened to switch agencies, and our agents are totally overwhelmed with full-service bookings that should have been made using the online booking engine. If we lost a client, could we hold the vendor responsible for the loss? For all the full-service reservations that would normally have been made online, can we legally charge the client our transaction fee for full service, which is three times as high as our fee for online bookings?
A: Like every technology vendor's contract that I have seen in the past few decades, your online booking engine vendor's contract probably contains both a disclaimer of all liability for system errors and a waiver of your right to sue for "consequential damages." The quoted term means losses that you suffer as a consequence of the vendor's breach, such as loss of business, revenue or profits.
For example, the standard Concur online booking engine contract states: "Concur does not warrant that any items or services will be uninterrupted or error free." Regarding damages, Concur states: "neither party will be liable for any special, indirect, incidental, consequential, punitive or exemplary damages in connection with this agreement, however caused and under whatever theory of liability, even if the other party has been advised of the possibility of such damages."
Some agencies get their Concur service through their franchiser or consortium, in which case the agencies have no contract with Concur and therefore cannot claim that Concur breached a contract with the agency, by definition. These Concur subcontracts may contain similar disclaimers and waivers, but even if they don't, it is hard to see how you could hold your franchiser or consortium responsible for the online booking system's downtime.
The standard GetThere contract offered by system owner Sabre to both Sabre and non-Sabre agencies contains similar disclaimers and waivers. The vendor even disclaims liability for loss of a record of any reservation that results in a carrier's denial of boarding.
If you have a lot of clout, you can try to get the vendor to agree to scale them back, or to provide a downtime compensation plan. Even without a right to compensation, agencies have been known to receive some recompense or credit from both vendors as a gesture of goodwill.
Whether you can charge your corporate client the full-service fee depends on the provisions of your travel management contract. Unless your travel management contract contains a disclaimer of liability for system downtime, the client could refuse to pay the higher fee, on the theory that you breached your commitment to provide an online booking facility.
Therefore, it is probably advisable to try to disclaim liability for reservation system errors and downtime in every such contract and expressly provide that in such cases you can charge your full-service fee.