Q: Our agency has a client who is a lawyer. He was allegedly injured on a cruise 18 months ago. He has sent the cruise line a letter threatening to sue, and the cruise line's attorney has written back stating that the one-year statute of limitations in the cruise contract prevents a suit now. Our client claims that the one-year limitation is unenforceable because he did not know about it and we didn't call it to his attention. Is he correct?
A: He is incorrect. As a recent federal court of appeals case makes clear, clauses such as shortened statutes of limitations are enforceable as long as certain minimal requirements are met.
In Baer v. Silversea Cruises, decided in October 2018 by the U.S. Court of Appeals for the 11th Circuit, the court held that the injured passenger was bound by the one-year limit for filing suit found in the line's contract because the cruise line passed the test of "reasonable communicativeness."
That test has two parts: First, the cruise ticket must have provided the passenger with "reasonably adequate notice that the limit existed and formed part of the passenger contract." Second, the passenger must have been given "ample opportunity to become meaningfully informed of the limitations provision."
In the Baer case, the plaintiff claimed that he was unaware of the terms of the contract when he boarded the cruise. However, the court found that issue to be irrelevant: "The second prong of the reasonable communicativeness test concerns not whether Baer actually read the contract, but whether he had the opportunity to."
The court's decision follows a line of cases upholding anti-consumer cruise line contracts under the "reasonable communicativeness" test, and that part of the decision is therefore not noteworthy. The really interesting part of the case is what the court said next.
Baer authorized his travel advisor to make the cruise booking. After that, the advisor received the passenger contract from the cruise line. About this, the court noted, "Further, we typically find constructive notice in other contexts where an agent accepts contract documents on behalf of a principal.
This means Baer had both actual and constructive notice of the contract terms."
The court implies that notice to the advisor alone would have been sufficient to bind the client, even if the latter never had any actual notice of the limitation clause in particular or the existence of the passenger contract in general. In other words, when a supplier gives a notice to an agent for the passenger, the client is deemed, under the law, to have received it.
The Baer decision creates a new legal duty for travel advisors: When a cruise line sends a passenger contract, advisors need to be sure to relay it to the client because the client became bound by the contract the moment the advisor received it. Otherwise, the client could sue the advisor (and his or her employer) for any loss suffered because the client was unaware of a contract clause that prevented redress against the cruise line.