Mark Pestronk
Mark Pestronk

Q: To what extent must our agency always disclose the names of travel suppliers that we advertise or sell? For example, in putting together an FIT proposal, I often hesitate to provide the names of resorts or local tour companies, as I have found that the client sometimes goes directly to the supplier, bypassing us. To take another example, if I do a Facebook post for a tour offered by a tour operator that most consumers have never heard of, do I have to disclose the name of the operator, or can I feature the tour as our own?

A: No federal statute or regulation requires a travel advisor to name the travel supplier in an advertisement, solicitation, proposal or sale. As long as your statement is not misleading or deceptive, you don't have to name names or even state that another party is providing the travel services.

At the state level, three states' seller of travel laws require you to furnish a purchaser with the name of the supplier at the time of the sale, but these requirements do not apply to presale ads or other solicitations, including social media posts.

Although disclosure is not required by any statute or regulation, you need to keep in mind the legal doctrine of "undisclosed principal," which is a judge-made applicable rule in every state. The doctrine states that if an agent fails to disclose at the time of the sale (a) the name of its principal and (b) the agent's status as an agent for the principal, then the agent becomes liable for any default or negligence by the principal.

In the travel agency business, the doctrine has been applied to hold agencies liable for refunds and damages where tour operators and resorts went out of business. On the other hand, where the agency did disclose the name of the travel supplier, or where the plaintiffs admitted that they knew the name of the undisclosed supplier, the agency was absolved of liability.

For example, in Van Rossem v. Penney Travel Service Inc., a New York court held that the retail agency was liable for a wholesaler's failure to pay for the plaintiffs' honeymoon resort stay because the retailer never disclosed the wholesaler's identity or the fact that it was acting as an agent for the wholesaler.

So at the time you make the sale (as opposed to the time you advertise or solicit), make sure that you avoid liability by disclosing the names of all the suppliers that you can disclose. If you do not know the name of a supplier at that time, you should disclose it as soon as you find out.

You also need to convey the fact that you are acting as agent for the supplier. You can do this by having the client agree to the terms of one of the sample disclaimers here. All of these state that "ABC Travel acts as an agent for the travel suppliers named in your itinerary" or the like.

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