Questions:
1. Identify the key information about the holiday as set out in brochure.
2. Critically analyse the package using the principles of contract law found in case law and categorise the statements into representations, terms, conditions and warranties.
3. Critically analyse and identify any material in the brochure which is potentially;
• unconscionable
• misleading or deceptive
• false representation
• bait advertising
• offers gifts or prizes
4. Critically examine the brochure and identify any exclusion or limitation clauses and explain using the principles of contract law whether the clauses would be valid.
The Premier Holidays are about to come up with a new travel tour named as the 2015 Faraway Tour. The Brochure of the 2015 Faraway tour is to be published recently. This tourist company has been making travel arrangements since the year 1936.
The 2015 Faraway Brochure primarily includes the introduction about the history and working of the Premier Holidays Company. This part states about the establishment of the company and history since the company was found. It further provides the detailed information about the reputation of the company as a travelling company among its customers.
It also describes about the passion and the commitment of the company towards their work. This portion of the brochure also gives the reviews of the customers that reveal about their experience after travelling with this tour company. And finally the company also states the various ways through which the company ensures that the customers’ money is saved.
From the next portion in the brochure, each chapter gives the entire details of their different tours. For instance, the Multi-centre itineraries give details of the different centre tours that the company conducts and also accordingly provide details of the amount of money required and the number of days of the tour. It further provides all details about the accommodations, entertainment, dining, dress code and all other activities that are necessary to include in the tourist holiday. The portion of the brochure also provides the day to day itinerary for the tours in the specific destinations.
In the similar fashion the other portions of the brochure provide the same details on the other tours arranged by the company. These destinations include Thailand, Malaysia, Singapore, Bali, Philippines, Hong Kong, China, Japan, Indochina, Burma, Middle East, Southern Africa, India, Sri Lanka, Indian Ocean and the Caribbean. The Brochure towards the end provides the details of the airlines and climate and the terms and conditions of the holiday agreement. In the portion for the airlines and climate the brochure gives all details about the language, currency, travelling time and local time of all the countries include in the holiday brochure. The most significant part of the brochure with regard to the law is the holiday agreement and the terms and conditions related to it.
These are the vital information that is provided in the company brochure.
It is extremely essential that the holiday agreement is based on the appropriate laws and fulfils all the requirements that are necessary to validate a contract. The primarily essential element in any contract is the terms of the contract (Clark et al., n.d.). The duties and the rights of the parties to the contract are identified through the terms of the contract. The terms of the contract may be expressed or implied. The expressed terms need to be determined by the written contract or the terms displayed or delivered or extrinsic evidence or parole evidence.
In this given agreement most of the terms are stated and is hence the expressed terms of the contract (Carter and Harland, 2004). The law the agreement governs, the terms and conditions for the different available offers such as the honeymoon or anniversary offers, the data protection policy, the terms relating to the financial protection, the financial protection provided by the company, the terms relating to the holiday price, the travel arrangements, any changes in the bookings, the terms in case of cancellations etc have all been mentioned in the holiday agreement.
Under some circumstances when the terms of the agreement are not intended to be promissory they cannot be considered as the contractual terms. If it is proved false, then remedies are available at common law and also under section 18 of the Consumer law. In Codelfa Construction Pty Ltd v State Rail Authority of NSW (Codelfa Construction Pty Ltd v State Rail Authority of NSW, [1982]) it was stated that any condition that indicates a term should be reasonable, equitable, give business efficacy, should be clear and must not contradict any express term. Most of the terms of the holiday agreement are reasonable, is clear and does not contain any contradictory term. It also gives business efficacy to the contract (Clark et al., n.d.).
The brochure provides for a segment on the important information. This can be said to be mere representations and are not terms of the contract as they firstly do not form a part of the contract and secondly they have been given not to have a promissory nature (Khoury and Yamouni, 2006).
All the consumers or the customers are entitled to the services that is being promised to be provided by this service provider. In such cases according to the Australian Consumer laws, when the consumer does not receive the required services of the service provider then he is entitled to receive a refund or compensation or any consequential loss depending on the conditions. The agreement provides for this under various terms. In the term ‘travel arrangements’ the consumers are entitled to compensation for any schedule change on the part of the travel company. Further in the clause for ‘Our liability for you’ the company provides that in case of any reasonable standard or proper performance not given to the customers, appropriate compensation would be provided to the consumer. These also act as warranties provided by the company. In case the consumer observes that the company does not comply with the warranties provided by the company then the consumer may take action against the company under the Australian Consumer law or for breach of contractual obligations. The company also provides for the modifications or change or cancellation of the travel bookings. In the clause it is mentioned that in case the travel company fails to comply with the necessary changes and is forced to cancel the bookings then the customers will be paid a full refund of the money. This also forms one of the essential parts of the contract.
Contracts also contain a number of implied terms and whether a particular term is implied or not depends on the conditions given in the contract. For instance, this holiday agreement contains under clause 6 c) of the agreement that in such cases where the customer s prevented from taking in holiday, the booking can be transferred to any other person, or he may be required to pay compensation and any other additional charges, in this term it is implied that when the customer is unable to go for the trip, the entire liability lies on the customer and under such circumstances the traveling company would not be liable in any manner. Hence it is an implied term in the contract (Khoury and Yamouni, 2006).
After detailed examinations of the contractual terms of the contract, there are few potential issues that might be raised. According to the laws of contract, if there are any misrepresentations or any such misleading or deceptive term then the legal regulations that it might attract are the Competition and Consumer Act 2010 and the section 18 of the Australian Consumer law. The contractual remedies are available at common law and the statutory remedies under the Australian Consumer law. Accordingly, no person is allowed to trade or commerce that might lead to any deception on the part of the company.
In the given holiday brochure the tour company gives honeymoon and anniversary offers to couples. However, what is essential is to clarify what are the exact things that are included in the offers and what are the things that are not included (Carter and Harland, 2004). Generally in such circumstances, the offer terms and conditions and the validity of the offers need to made very clear to the customers so that that there are no hidden costs in the offers and the customers are later compelled to pay a lot more money. Hence the term in the brochure relating to the anniversary and the honeymoon offers need to be clear as to the inclusive of such offers.
The company also mentions about the Premier Plus, Bonus Buys and Early Booking Offers. In the term it has been mentioned that such offers are subject to the availability and that the company reserves the right to withdraw the offer at any time without giving any prior notice. This term is very vague and allows for a lot of discrepancies to flow in.
In the above two cases of discrepancies in the holiday brochure it must be noted that in the first case regarding the honeymoon and anniversary offers the offer must be elaborated as to incorporate the things that needs to make the offer just and fair (Khoury and Yamouni, 2006). In such cases, where the offer is not clear and results in ambiguity the customers will have the right to sue the company for breach of contractual term. Also the company may be held for deception or misleading conduct under section 18 of the Australian Contract act (Paterson, 2011).
In the second case, the offer on premier plus, bonus buys and early booking, the offer term is somewhat an unconscionable conduct. This is because the term gives one sided favor to the company. Hence such term should be modified to make it more consumer friendly or it should be deleted.
Every contract provides for exclusion clause and limitation clauses in their terms and conditions. An exclusion clause in a contract is such a provision according to which the liability of one party is excused in given conditions, circumstances and situations (Carter and Harland, 2004). It essentially means that under the given conditions the service provider would not be liable of any damage and for the payment of any compensation (Lindgren, Carter and Harland, 1986). In order to have an effective exclusion clause the term of contract must be incorporated in the agreement, the wording in the term must clearly mention the liability in question and it must not be prohibited by the statutory or general law such as the Unfair contract terms Act (Paterson, 2011).
In the given holiday agreement, there are a number of exclusion and limitation terms included in the contract. For instance, under clause 7 there is sub clause on force majeure. In accordance to this term, the company will not be responsible or pay any compensation if the cancellation or modification in the travel arrangements is made due to any unforeseeable or unusual circumstances that are not in the control of the company. Such unusual circumstances may include any natural disaster such as unfavorable weather conditions, earthquake, volcano or similar conditions. It also includes the wars, riots, terrorist activities, or industrial disputes, or any epidemic or pandemics. This clause removes all types of liabilities from the company under such circumstances.
Clause 8 of the agreement provides that the company will not be liable for any loss or expense that is incurred due to the cancellation or delay in transport as a result of the carriers. Clause 5 of the contract states that incase of any change of the travel arrangements due to the customers, the company states that it will not be liable for any loss of expenses incurred as a result of the changes or major alterations made in the existing holidays. Further the clause also states that the company would not provide any refunds in the case of any unused accommodation or service by the customer.
Additionally, under clause 14 of the agreement that provides for the term son excursions, the company clearly states that in such cases where the customers book any excursion tour with any other operator, the company would not be liable for the terms and conditions of the excursion tour. The company also will not be liable for anything that might happen to the customer as a result of the excursion tour with the tour operator.
References
Carter, J., Harland, D. and Lindgren, K. (1991). Contract law in Australia. Sydney: Butterworths.
Clark, E., Griggs, L., Cho, G. and Hoyle, A. (n.d.). Contract law in Australia.
Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982]CLR 149, p.337.
Khoury, D. and Yamouni, Y. (1992). Understanding contract law. Sydney: Butterworths.
Lindgren, K., Carter, J. and Harland, D. (1986). Contract law in Australia. Sydney: Butterworths.
Paterson, J. (2011). Unfair contract terms law in Australia. Pyrmont, N.S.W.: Thomson Reuters (Professional) Australia.
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