My agency's group desk
operates without written contracts with suppliers or groups.
Lately, we are finding that suppliers are trying to deal directly
with our groups and refusing to pay us any commission.
Resort properties seem to be the worst culprits. Do we have
any rights if we are cut out of the deal?
A: When you say "the deal," you put your finger
on the problem. What is the deal? In the absence of a written
contract, how could you prove what the deal is? Usually, you
can't.
As I wrote in a recent column regarding contracts formed by
exchanges of e-mails, you can have a valid contract even if you
don't have a signature or even any document called a contract.
All you need is an e-mail in which one party offers all material
contract terms and a subsequent e-mail from the other party
accepting those terms.
Given the ease with which you can form e-mail contracts with
suppliers, it is inexcusable for your group desk to operate by
relying solely on telephone conversations and handshakes.
Your agency will be bypassed again and again. The other side
will deny it said what you claim it said; worse, the person who
said it will become uncooperative and unavailable when you need him
or her most.
You also need contracts with your groups. Otherwise, the group
will feel free to bypass you and deal with suppliers directly.
To make matters worse, if a supplier is unable to recover any
money from the group because the group never agreed to anything in
writing, the supplier will come after you even though you may not
be legally responsible for the group's debt.
Aside from the absence of contracts, the second-biggest mistake
agency group desks make is to sign supplier contracts in the
agency's name. Never do this unless you actually want to assume
inventory risk of unsold seats, hotel rooms or cruise cabins.
Instead of signing in your agency's own name, sign the
supplier's contract as agent for the group. The words above your
signature should read "ABC Travel as agent for American Dental
Association."
Before you do this, get a contract from the association
authorizing you to sign contracts as its agent.
Mark Pestronk is a Fairfax, Va.-based attorney specializing
in travel law. He answers your questions in the TravelWeekly.com
Legal Ease forum. To contact Mark directly, e-mail him at
[email protected].