Mark Pestronk
Mark Pestronk

Q: About four months ago, our agency signed a contract with a very large corporate account. Under the contract, we were designated as the exclusive travel management company for all of the corporation's U.S. employees. The contract became effective as soon as we signed it, but nothing has happened in the past four months to migrate the business over to us from the outgoing travel agency. The corporate travel manager made excuses at first, but now he has stopped returning our calls. Meanwhile, we have hired extra agents at great expense. Have you ever heard of this before? If so, do we have any right to insist on the business? If we do not get it, can we potentially sue for damages?

A: The signing-and-ignoring pattern you describe is actually quite common. If it is any consolation, I imagine that every corporate-oriented agency has encountered it at one time or another.

Even more common are two related problems in corporate travel: first, the account promises exclusivity, but you get only a piece of the total business; and second, you get all the business, but it turns out to be much less than the exaggerated amount in the account's request for proposal.

Your rights in all these predicaments are determined by the exact language in your contract. Ideally, the exclusivity clause would state something like this: "Client shall refrain from using any other travel agency or travel management company for the business travel of client's employees and from bypassing agency by making travel arrangements directly with any airline, hotel or car rental company without using agency's ARC number or by entering into a GDS contract directly with any GDS vendor."

In that case, you have a legal right to all the business and the fees that would be generated by it. If the contract is for a fixed term of years, then your damages are equal to all the fees that would have been generated during those years.

Of course, I don't recommend that you sue the account right away, as a suit should only be a last resort. Instead, begin by writing a formal business letter to the corporate travel manager pointing out the corporation's obligations. If that does not work, then write a letter to a higher decision-maker stating the same thing. If that fails to produce results, get a lawyer to write a letter to the corporation's general counsel pointing out the company's legal obligation and stating that it is your hope to avoid litigation.

It probably makes sense to sue only if you are dealing with a very large account and your contract states that the loser must pay the winner's attorneys fees. Otherwise, the time and expense of a suit may not be worth it.

Unfortunately, most corporate-account contracts do not promise such exclusivity. Either they contain wishy-washy words such as "client will designate agency as its preferred travel management company" or they contain no promises at all about what you will get. For example, most corporations' Master Services Agreements promise nothing at all.


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