Mark Pestronk
Our agency has many clients who go to Mexico for vacations. Although (to our knowledge) no Americans were injured in the recent cartel violence, some were delayed and incurred extra expenses, others left early and probably forfeited some of their trip costs, and all were certainly frightened. So I have several questions about our legal responsibility.
Q: Do we have a duty to warn clients about the potential for cartel violence?
A: Your legal duty is limited to disclosing reasonably obtainable, relevant risks about the destination that a reasonably informed consumer would not necessarily know. Here, the risk is something that every reasonably informed consumer already knows about, so you have no duty to warn in this situation.
Nevertheless, if a client suffers a loss, he may sue you anyway because his attorney will probably sue every company in the chain of sale, even if the case against you has no merit. You are especially likely to be sued if your agency is the only domestic entity in that chain.
Q: How do we deter such nuisance lawsuits?
A: If you don't do so already, I strongly recommend that you get all future clients to agree to a disclaimer such as those at www.pestronk.com/resources. Using disclaimers will deter potential lawsuits and will help you win actual lawsuits in case a client sues you.
In addition, you should certainly offer cancel-for-any-reason insurance (CFAR) policies to all of your vacation clients. Like having clients agree to your disclaimer, offering CFAR policies will tend to deter potential lawsuits.
Q: Does the duty extend to advising clients to cancel or postpone their trips?
A: You have no legal duty to advise clients to cancel or postpone any trips. Your legal duty is merely to disclose facts or warn under the circumstances described above. It is up to the client to decide whether to go.
Q: If clients want to cancel an upcoming trip, does the violence constitute force majeure that would enable the clients to receive a full refund instead of incurring cancellation penalties?
A: No, the term "force majeure" means an unexpected occurrence that prevents a party from performing a contract. There's no force majeure here, as the clients aren't prevented from going, and the resort isn't prevented from honoring their reservation.
Q: If our clients have been to Mexico many times before, do we still have the duty as explained in your first answer above?
A: There is no frequent-traveler exception in the law, but if you are certain that your clients do not want any disclosures from you, you should document the client's position in order to defend against future claims.
Q: If we sell through a wholesaler, would it be the wholesaler's duty to warn instead of ours?
A: There is no wholesaler or other upline exception in the law, so I would have to say that you still have the duty described above. However, if the wholesaler communicated the same risk directly to your clients, you would not have to duplicate it.