Question:
Produce a report for management outlining the issues relating to the brochure?
The holiday brochure of Hunstanton Holidays Pty Ltd provides significant information to the consumers and for the purpose of making this report, this particular holiday package brochure has been evaluated. The purpose of this analysis is to see if any information that has been given by the company in its brochure can be considered as misleading, unconscionable or deceptive or if the information present in the brochure can be said to be a false representation. In the same way, the holiday brochure of the company has also been examined to see if the company has offered any price or gift to the consumers in its brochure and if there is any information given by the company and the brochure which can be said to be bait advertising. At the same time, the impact of present legislation that is all the information that has been provided by the company in the brochure has also been studied.
The law of contract provides that the parties can classify the terms of a contract as conditions, warranties or representations. Had this point, it has to be noted that while earlier, there were only two categories of the terms of a contract, conditions and warranties however in Hong Kong Fir Shipping v Kawasaki (1926) the court also created another category of the terms of a contract which was called innominate terms. The correct classification of the terms is very important for the parties because they remedies that are available to a party differ in each category of these terms (Carter and Harland, 2004).
The law of contract also requires that the parties cannot make false or misleading claims that are related with the supply of goods or services by such a party. In similarly, it has also been prohibited by the law that false or misleading claims should not be made regarding the description of goods or services that are being offered by a party. In this way, the businesses have been prohibited from making false and misleading representations regarding the value, quality or the standard of their products being offered to the consumers (Khoury and Yamouni, 2006).
A condition has been described by the law as a significant term of the contract and such a term goes to the root of the contract. If such a term has been breached, the other party gets the right to terminate the contract. Moreover such party can also claim damages. But in case of a breach of warranty, which are the minor terms of the contract, the right to terminate the contract does not arise for the innocent party. In such a case, the innocent party can claim damages but is not in a position to legally terminate the contract. On the other hand, when an innominate term has been breached, the court is required to see what will be the effect of such a breach. The result is that if the court arrives at the conclusion that as a result of the breach of such a term, the opposite party has lost nearly all the benefit that was to be derived by such party under the contract, then in such a case, the opposite party will be allowed by the court to terminate the contract and also to claim damages.
In this regard, the provisions of section 18, Australian Consumer Law also need to be considered. According to this provision, the parties to contract cannot engage in any type of misleading or deceptive conduct while supplying goods or services to the other party. In this context, misleading or deceptive conduct has been stated by the courts to include actions as well as the silence of such a party. While evaluating the contents of the Hunstanton Holiday brochure, all the terms present in this contract have been analyzed to see if they can be categorized as conditions or warranties. Another point that needs to be mentioned is that, law and also statute law governs the advertisements in Australia. Apart from these, government agency and self-regulation is also present on the advertisements issued by companies.
An analysis of the Hunstanton Holiday brochure reveals that there are different terms present in this contract which can be classified as conditions and warranties. For example there is a term present in the brochure which provides that $35 will be charged by the company every day if the consumers want to take along their pets on the holiday. Therefore it has been mentioned clearly in the brochure that the consumers have to pay this amount for taking their pets along. There is another term mention in the brochure which provides that the accommodation that will be given to the consumers will be equipped in the same way as described. But it needs to be noted that it has not been made clear if the image of accommodation present in the brochure can be included in the description. The result of this ambiguity is that it is possible that several consumers will be under the impression that the accommodation will be the same as shown in the images issued by the company. Another duty imposed on the companies by the law is that small print cannot be used by the companies to evade their duties (Bentley and Page, 2001). As a result of this legal position, it becomes the obligation of the company to clearly mention if the accommodation that will be provided to the consumers will be the same as shown in images or if it will be different.
Another term mentioned by the company provides that it is not the responsibility of the company to compensate the consumers if they suffer any loss or damage. In this way, all responsibility has been imposed on the consumers only. With the help of this term, an attempt has been made by the company to exempt its liability if any loss or damage has been suffered by the consumers. But it is also true that the position of the company is better when it comes to take the steps required for reducing the chances of suffering a loss or damage. In this regard, the legal position states that the company cannot use disclaimers if their conduct is misleading or deceptive. But in this regard it also needs to be noted that such disclaimers cannot be ignored by the consumers completely. The law provides that if the disclaimer was brought to their notice and has been mentioned prominently before the parties have entered into a contract, such an exclusion clause can be enforced and protect the company. However, ultimately the enforcement of an exemption clause relies on the facts of every case (Johnson, 1992).
Another term of the brochure requires that the holidaymakers have to leave their rooms clean and tidy at the time of their departure. It has been clearly mentioned by the company that if the company is required to arrange for the cleaning of the room, such expenses will be charged from the consumer. Therefore this term informs the consumers that they may have to pay extra if at the time of their departure, they do not leave the accommodation clean and tidy.
One more term is present in this brochure which has been included to exempt the company from any liability regarding the loss or damage suffered by consumers’ belongings. It has been mentioned in this term that the company cannot be considered as liable if the belongings of the consumers are stolen or any other damages suffered by these goods. With the inclusion of this term, the company has tried to place whole of the responsibility related with the safety of the belongings of consumers on the consumers themselves and it has been claimed by the company that it cannot be held liable if a loss or damage has been suffered by the goods of the consumers.
One more term is present in the brochure which deals with booking of holidays. It has been mentioned by the company that the holidaymakers should check if the dates that they are looking for are available. When the preferred dates of the consumers are available, this term provides that the consumers should immediately book those dates. In this regard, it has been prescribed by this term that a booking amount of $100 has to be paid by the consumers at the time of booking.
But at the same time, it has also been mentioned in this term that if the total charge of the holiday that is being booked by the consumer is less than $100, then the whole amount of the holiday has to be deposited by the consumers.
It has also been provided by this clause that the company shall not return the booking amount and in case the consumer wants to cancel the booking, the amount paid at the time of making the booking shall not be returned by the company. The meaning of these two provisions is that in some cases it is possible that the whole amount of the holiday which is less than $100 has been paid by the consumer while making the booking and when the consumer wants to cancel the booking, the company can refuse to return the amount that is practically the whole of the amount charged by the company for the holiday.
There is one more exemption clause present in the brochure of the company. With the help of this term, Hunstanton Holidays has made an attempt to exclude or at least restrict its liability. This term which is present in the brochure states that the company cannot be held responsible for the loss or damage that has been caused to the consumers for various reasons like mechanical breakdown, acts of government, inclement weather or war. Another term has also been inserted in the contract by the company which states that the company cannot be held responsible for a loss that has been suffered by the customer as a result of acts of God like floods and fires; building activities and other such causes. Similarly regarding any users that may be caused to the consumers by naming properties, there is a term which mentions that in such a case also, the company cannot be held responsible. As a result, the analysis of these terms reveals that such terms have been inserted by the company in its brochure in an attempt to completely exclude or at least restrict the liability of the company in some cases.
Another term that has been inserted in the contract is related with the provision of alternative accommodation. This term provides that if despite the best efforts of the company to give the consumers an alternative accommodation if you do any reason, the promised accommodation cannot be provided to them due to a reason that is not within the control of the company, the company cannot be considered to be responsible for the loss that may be suffered by the customers due to the fact that the company has not provided the promised accommodation to them. Therefore this term mentions that in such a case, the responsibility of the company only extends to the amount that has been charged by the company from the consumers. With the help of this clause, an attempt has been made by the company to restrict its responsibility to the amount that has been laid by the consumers to the company. But it is possible that in some cases, considerable loss could have been suffered by the consumers due to the fact that the promised accommodation has not been provided to the consumers by the company.
Conclusion: In the end, it can be said that after analyzing the brochure of this company that various terms have been mentioned by the company which can be classified as conditions and warranties. Similarly, an attempt has also been made by the company to exempt its responsibility towards the consumers in some cases.
References
Bentley, T.A. & Page, S.J. 2001, ‘Scoping the extent of adventure tourism accidents’, Annals of Tourism Research, vol. 28, pp. 705-726
Carter and Harland, 2004, ‘Contract Law in Australia,’ 4th ed., Butterworths Lexis Nexis
Johnson, P, Thomas 1992, Choice and Demand in Tourism. London: Mansell Publishing Limited
Khoury & Yamouni, 2006, ‘Understanding Contract Law,’ 7th ed., Butterworths Lexis Nexis
Case Law
Hong Kong Fir Shipping v Kawasaki Kisen Kaisha (1926) 2 QB 26
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