Discuss about the Critically analyse the package using the principles of contract law.
A holiday package includes arrangements of transportation and accommodation which is advertised, sold and promoted by a tour operator or travelling agent. The travelling agent provides other services as well such as rental car, organised activities, food facilities and others. In recent years, the culture of holiday packages has grown, and people pre-book their holiday arrangements in order to make their holidays more convenient and comfortable (Wang & Davidson, 2010). The tour operators present a number of information and terms and conditions regarding the holiday package in their brochure. It is necessary that the information included in the brochure comply with Australian legislation regarding contract law and consumer law. This report will focus on analysing a holiday package of Thomas Cook “South African Paradise (winter)”. This report will analyse the representation warranties, terms and conditions provided in the brochure of Thomas Cook in respect of Australian law. This report will focus on identifying any material in the brochure which can potentially be considered as misleading, false representation, bait advertising, or deceptive. Further, any exclusion or limitation clauses in the brochure will be discussed in the report using the principles of contract law.
The Australian Consumer Law (ACL) is a nationwide law in Australia which governs fair trading and consumer protection policies in Australia (Corones, 2011). Primarily, the law focuses on protecting the interest of customers against unfair trading practices and providing them remedies when a corporation breaches the regulations of Australian Consumer Law. The secondary functions of ACL are providing standards for safety and establishing manufactures liability and product liability (Nottage, 2009). In order to evaluate the legal relevance of the holiday brochure of Thomas Cook, the analysis will focus on five key tests which include misleading, unconscionable, bait advertisement, false representation and offers and prices. Thomas Cook Group PLC was founded in 2007, and it operates in hospitality and tourism industry. It is a British global travel corporation, and it offers its services across the globe (Thomas Cook, 2018). The name of its brochure is “South African Paradise”, and it will only be available during the winter season. The time period for the brochure is nine nights and ten days. During this period, customers will stay three nights in Cape Town, two night in Kwantu Private Reserve, two nights in Knysna, one night in Johannesburg and one night in Sun City.
Further, the brochure includes information regarding planned route and places or monuments where guests will be visiting and information about time to stay in each place. The itinerary details included in the brochure contains complete details regarding first to the tenth day of the vacation and information regarding the daily schedule of the guest. In terms of hotel details, the brochure includes every minute detail regarding the check-in and check-out time of guests and the name of hotels in which guests will be staying during the vacation. A price will also be given to one lucky customer who purchases this package within the given time limit. Further, information regarding the transportation of guests is also included in the brochure such as flights timing, check-in and departure times. Moreover, information regarding services of a guide, entrance fees in each monument, price of the package, various terms and conditions, cancellation policy, medical and insurance claim, visa policy and various other policies are given in the brochure.
Based on the principles of Contract law, the agreement between two or more parties for performing or not performing any particular task under specific terms and conditions is mandatory to be followed by each party (McKendrick, 2014). Customers who have booked the holiday package from a travel agent has signed a bilateral contract in which the agent assures the customers that services provided in the brochure will be given to them on a mutually agreed amount based on specific terms and conditions. Following are a number of terms and conditions which are necessary to be followed by both travel agent and customers.
Price exclusions: The price exclusions are referred to expenditures of personal nature such as tips, telephone charges, Wi-Fi facility in hotels, and other services which are excluded from the package, and they are not included in the price of the package.
Price inclusions: These are referred to things which are included in the holiday package such as hotels, train fees, entrance fees, transportation, guide services, airfares, meals and others.
Validity: The validity of the package is referred to duration or time limit of the contract. It provided that in the given period, there will be no changes in services or price of the holiday package and customers can book the package for the same price in the given time period.
Insurance package: When customers are travelling abroad, then they are required an insurance policy that covers full risks during their trip. It provides policies regarding if any mishap happened during the trip then the insurance policy will pay its charges.
Policies regarding medical claims: If any customer suffers from any illness during the vacation then medical charges are not included in the holiday package. These charges are hidden, and they are disclosed to customers while at the time of booking.
Flight taxes: The taxes which are paid by customers at the airport are not included in the holiday package. Generally, these taxes are hidden, and they are disclosed after booking of the package.
Visa charges: Generally, the visa fee is not included in the price of holiday package and customers have to pay extra charges for visa fees.
Alternate arrangements: This clause provides details regarding extra charges that are paid by the customers in case hotels are waitlisted or rooms are booked other than base rooms.
After a thorough analysis of the brochure, it can be seen that there are a number of disadvantage in terms of false representation, deceptive or misleading, unconscionable, bait advertisement and offers, prices and gifts in the holiday package of Thomas Cook. Firstly, the brochure did not contain a proper schedule of destinations or place where customers will be visiting during the vacation. The overview given by the company did not contained detailed information which can confuse customers. The lack of information regarding time and detailed description of the hotels and places where customers will be visiting is not available then they cannot get a proper picture of the entire trip. Another issue with the brochure is that it includes many hidden charges which should be displayed clearly by the enterprise so that customers are able to estimate how much the trip would cost them. Most companies write the lowest prices on their brochure, whereas, in reality, they put additional changes on customers in terms of hidden prices or taxes.
As provided in the Ellul and Ellul v Oakes (1972) 3 SASR 377, the parties must have intended the terms of a contract in order to make it promissory in nature (Barker, Grantham & Swain, 2015). In this case, Ellul purchased the property from Oakes, and in the listing form, it was written that the land is severed. The property was not severed an Ellul claimed for damages. The court held that Ellul could claim for damages because parties must have intended the term of a contract in order to make it promissory in nature (Thorpe, 2011). In case of Thomas Cook holiday brochure, the terms specified in the brochure are necessary to be correct or else customers could claim for damages. Therefore, companies should maintain transparency in terms of prices and taxes charged to the customers because it will assist them in arranging the capital which is required for them to enjoy their vacations properly. Furthermore, the brochure did not include any details regarding company’s USPs (unique selling proposition) and discounts.
The customers have to spend a lot of time in order to read the brochure and understand its terms. Moreover, it has seen in many cases that travelling agents or companies cheat their customers by giving them less costly accommodations than demanded. For example, the customer demand and paid for 4-star hotel accommodations. However, the company provides them 3-star hotel facilities while charging the rate of 4-star hotels (Karcher, 2013). Therefore, the company must ensure that details provided in the brochure are correct and customers receive same facilities as provided in the brochure. Thomas Cook has edited the pictures in its holiday brochure to make them more appealing which can be considered as false advertising. Further, the company is required to add a disclaimer in the brochure that customers will be responsible for their own safety; therefore, they should take precautionary measure to avoid any injury and safety of their belongings.
After the thorough analysis of the brochure, it can be seen that the information relating to the prices of tickets is ambiguous and it can confuse customers. It is provided in the brochure that tickets’ prices will be changed at the time of travelling, however, in reality, the rate of tickets entirely different from the ones which are specified in the brochure. Additionally, customers believe that they will be charged as per the same rate specified in the brochure. It is known as an ambiguous representation which is used by the company to mislead customers. In this situation, the principles of contract law are violated by the corporation, and the customer can claim for damages (Smythe, 2013). The contract law protects customers when they are being manipulated by the travel company. Many times companies offer extra services to customers in order to attract them, however, in reality, they did not provide such services to them. In such case, customers can claim for extra services from the company if they are not provided to them as per the contract law. There are no false facts in the brochure of Thomas Cook; however, there are many misleading statements in the brochure.
As per section 7 of Unfair Contract Terms law, the company is required to clearly provide which expenses will be included and excluded in the brochure (Paterson, 2009). Thomas Cook has clearly provided what will be included and excluded in the price of a holiday package. The Baltic Shipping Company v Dillon (1993) 176 CLR 344 case provided provisions regarding misrepresentation of information in a brochure (Butler, 2018). In this case, Mrs Dillon faces critical injuries due to missing information in the brochure of MS Mikhail Lermontov Company. The court held that company is liable to pay for the damage because of its misleading brochure. It shows the concerns of Australian Law regarding the presentation of right information in the brochure (Wilson, 2010). Therefore, Thomas Cook should exclude misleading or missing information from the brochure which can negatively affect its customers, and the company can be held legally liable for damages occurred due to such misrepresentation.
Conclusion
In conclusion, the holiday package brochure developed by Thomas Cook contains all the necessary information regarding terms and conditions of the package. However, there are some elements in the brochure which can be considered as misleading, false advertisement and deceptive. The information included in the brochure should provide as per Australian Contract Law and Consumer Law. Different elements which are excluded and included in the contract as per Unfair Contract Terms law are provided in the report. The company should remove ambiguous charges information from the brochure and include a disclaimer regarding the responsibility of customers. These factors assist Thomas Cook in improving its reputation and avoiding any legal consequences that can occur due to misleading or false information provided in the brochure.
References
Barker, K., Grantham, R., & Swain, W. (Eds.). (2015). Law of Misstatements: 50 Years on from Hedley Byrne v Heller. London: Bloomsbury Publishing.
Butler, D. (2018). Employer liability for workplace Trauma. Abingdon-on-Thames: Routledge.
Corones, S. G. (2011). The Australian consumer law. Melbourne: Thomson Reuters Lawbook Co.
Karcher, K. (2013). Reinventing the Package Holiday Business: New information and communication technologies. New York: Springer-Verlag.
McKendrick, E. (2014). Contract law: text, cases, and materials. England: Oxford University Press (UK).
Nottage, L. (2009). Consumer law reform in Australia: Contemporary and comparative constructive criticism. Queensland U. Tech. L. & Just. J., 9, 111.
Paterson, J. (2009). The Australian Unfair Contract Terms Law: The Rise of Substantive Unfairness as a Ground for Review of Standard Form Consumer Contracts. Melb. UL Rev., 33, 934.
Smythe, D. J. (2013). Consideration for a Price: Using the Contract Price to Interpret Ambiguous Contract Terms. N. Ill. UL Rev., 34, 109.
Thomas Cook. (2018). Thomas Cook History. Retrieved from https://www.thomascook.com/thomas-cook-history/
Thorpe, D. (2011). CEOs and domestic tribunals—The rights and risks of penalising athletes for off-field misconduct. Sport Management Review, 14(3), 269-286.
Wang, Y., & Davidson, M. C. (2010). Pre-and post-trip perceptions: An insight into Chinese package holiday market to Australia. Journal of Vacation Marketing, 16(2), 111-123.
Wilson, J. (2010). Employment Law Matters General Damages in Discrimination Matters. Ethos: Official Publication of the Law Society of the Australian Capital Territory, (218), 8.
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