Q: Gogo Vacations has issued a new "Sub-Agent Agreement" that it requires retailers to sign. That agreement appears to contain several clauses that, among other things, disclaim liability for whatever happens on a trip. Does such an agreement help us defend against client claims by binding our client to these disclaimers, or does it make it even more vital that we get clients to agree to our own disclaimer protecting our agency? Also, if our frontline agent signs the Gogo agreement as part of the booking process, would such a signature bind our agency?
A: Gogo's agreement does not bind your client; nor does it protect you. If your client sues you for a loss or injury during a trip, Gogo's agreement effectively prevents you from getting Gogo to cover your client's loss, so you need your own disclaimer more than ever. You can find free sample disclaimers for your agency at www.pestronk.com/free.html, but remember that sample forms cannot cover every problem that arises.
Gogo's own disclaimer is very comprehensive: "The Travel Agents' use of the products hereunder provided by Gogo Vacations are [sic] at Travel Agents' own risk and that Gogo Vacations is supplying all products on an 'as is' basis without warranty of any kind, either express or implied, and Gogo Vacations hereby disclaims all warranties."
Gogo's agreement not only protects itself from liability but it also shifts liability onto your agency to a greater extent than any other industry contract I have seen. Even the ARC agreement is not as one-sided.
For example, the agreement states, "The Travel Agent indemnifies and keeps indemnified Gogo Vacations against all losses, damages, claims, costs (including reasonable attorney fees), demands and expenses which Gogo Vacations may sustain or incur directly or indirectly from or concerning: (i) any failure by the customer ... to pay for the booked Products in accordance with Gogo Vacations payment terms as advised from time to time; (ii) any chargebacks or bounced checks by the ... customer ;... (v) any injury or death to any customer or any person howsoever caused arising out of the sale of the Products; and (vi) any damage, loss or theft of any property belonging to any customer."
So if your client fails to make a final payment, your agency owes it. If your client's credit card is dishonored, your agency owes the money. If the client successfully disputes a credit card charge after the trip, your agency is on the hook to Gogo.
In addition, the paragraph quoted above makes your agency the insurer against anything that can go wrong on a trip, including injury or death. If Gogo gets sued by your client for any reason, you must pay its attorney's fees. If an accident is determined to be Gogo's fault, you must reimburse Gogo for the amount of the judgment against it. If your client's property is stolen at the resort, you must cover any verdict against Gogo.
If your frontline agent signs Gogo's agreement, the signature would probably not bind your agency because he or she would have no actual or implied authority to do so. No one below the position of manager would normally have such authority, but it is always safer to instruct your employees not to sign any contracts.
Mark Pestronk is a Washington-based lawyer specializing in travel law. To submit a question for Legal Briefs, email him at [email protected].