Non-regulated Contracts

AuthorMatthew Chapman/Sarah Prager/Jack Harding/Dominique Smith/Thomas Yarrow/Henk Soede
Pages233-287

Chapter 6

Non-regulated Contracts

6.1 Previous editions of this work have concentrated largely on the operation of the Package Travel Regulations 1992 and on the international conventions relating to particular forms of carriage; historically, the chapter on non-regulated contracts has been overshadowed by those dealing with these provisions. With the implementation of the Package Travel Regulations 2018, still more types of travel booking fall within specific regulation, and practitioners should always consider first whether any particular travel booking is a regulated one. That said, common law principles continue to apply alongside the Regulations and to unregulated contracts, most notably in relation to accidents occurring during the course of excursions booked locally. Furthermore, the express terms of a package travel contract may well impose wider or more specific obligations than the Regulations, and it should also be borne in mind that most travel bookings will establish a relationship giving rise to a tortious duty on the part of the organiser to the traveller(s). Common law principles therefore remain significant even in the light of the new Regulations.

REGULATED PACKAGES AND COMMON LAW PRINCIPLES

6.2 Common law principles are significant even where the arrangements in question qualify as a regulated package. There are at least four major areas in which general principles should remain at the forefront of the consideration of regulated packages. These are:

(a) The formation of the contract, which will tell us when a contract has been concluded, and the identities of the parties to it.

(b) The contents of the contract (or associated non-contractual duties), particularly the inclusion or otherwise of implied terms, which will tell us what services under the contract are subject to regulation and the regulatory liability regime. Terms as to the standards of health and safety in place at a

234 Saggerson on Travel Law and Litigation

resort or in respect of food and hygiene are often the subject of implication. Whether a term can properly be implied or not is a matter for the implementation of general legal principles; the Regulations themselves do not help. On the existence or otherwise of an implied term may depend a finding of whether there has been any failure in the performance of the contract or improper performance of it. After all, there can be no failure to perform the contract if the obligation on which the alleged failure depends is not either an express or implied term1of the regulated package travel contract.
(c) Duties and liabilities arising in respect of additional services supplied alongside (but outside) the regulated package travel services, excursions being the most obvious and frequent example. For example, an incident arising out of a badly organised excursion or event, booked locally and paid for separately, may still be actionable against a tour operator even though, because the incident or event does not involve the lack of conformity with the contract for travel arrangements, the Regulations cannot be deployed against the organiser.2

(d) The assessment of damages and related principles of causation3and remoteness.

6.3 In addition, there will be cases where a traveller chooses a common law route instead of or in addition to claiming under the Regulations. This will occur, for example, in an action based on fraudulent or negligent misrepresentation where the traveller suffered consequential but not foreseeable losses as a result of a failure to perform the package travel contract.

1The cases under the Package Travel Regulations 1992 never did get to grips with the fact that regulation 9(1)(b) required the other party to the contract to ensure that the terms of the contract are set out in writing or in some other form as is comprehensible and accessible and are communicated to the consumer before the contract is made. Regulation 9(1)(c) required a written copy of the contract terms to be supplied to the consumer. Regulation 9 certainly did not prevent the continued wholesale implication of terms as to quality and fitness in regulated package travel contracts.

2See, e.g. Brannan v Airtours (1999) The Times, 1 February.

3Stockman v First Choice Holidays, 28 April 2006, Eastbourne County Court (unreported) is a case in point on causation. Mrs Stockman was promised a transfer from the airport by mini-bus. In the event she proved that what was provided was a micro-bus, on the step of which she had fallen, lacerating her leg. Technically a breach of contract, the provision of the wrong sort of bus, was not causative of any damage, as it was shown that the step on a mini-bus was higher than that on the micro-bus provided.

FORMATION OF THE CONTRACT

Offer and acceptance

6.4 Detailed consideration of general contractual matters such as offer and acceptance and the incorporation of terms is not part of the scope of this work. However, in respect of both the formation of the contract and the incorporation of terms, there are some special situations that arise in the context of travel contracts which are worth discussing briefly here.

6.5 Brochures and other material of a promotional nature are likely to be treated as invitations to treat, not offers to sell packages or other travel arrangements. This would be entirely consistent with other retailing arrangements.4It is the traveller who offers to buy the product promoted by the organiser in a brochure.5

6.6 When the traveller has considered the brochure or other promotional material, he may contact the tour operator or organiser directly or via a travel agent. Alternatively, some travellers may go straight to the travel agent and make use of the travel agent’s direct computer links with various commercial organisers. It is submitted that in this situation the organiser is still only inviting the traveller to treat, and not making an offer to sell the arrangements on display. The invitation to treat of the tour operator may be considered to be at a more advanced stage than the invitation to treat in the brochure, if only because the computer data will be able to say more about availability, perhaps more about the number of people already booked on a specific package and perhaps more details will be available as to price. Nonetheless, this type of computer display remains an invitation to treat. It would be unreasonable to bind the organiser or tour operator to a contract simply by the traveller sitting at a travel agent’s desk and stating ‘I accept the offer now on the screen’, particularly when the organiser has regulatory obligations to ensure that certain information is conveyed to the traveller before the contract is made. The Package Travel Regulations 2018 impose criminal sanctions for failure to provide a plethora of information prior to the formation of the contract; these provisions would be entirely unworkable if a contract were formed at this stage in a travel booking.

6.7 Computer screen displays and brochures often now inform travellers booking via travel agents that no contract will come into effect until such time as the traveller receives or the organiser despatches written confirmation of the booking made. While the peremptory refusal of the tour operator to recognise the existence of a contract before the confirmation is despatched would not

4Fisher v Bell [1961] 1 QB 394 and Partridge v Crittenden [1968] 1 WLR 1204.

5Although on the facts of any particular case one must be careful to distinguish an offer to buy from a mere enquiry (e.g. as to price). Harvey v Facey [1893] AC 552.

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necessarily prevent an objective application of the rules of offer and acceptance leading to the conclusion that there was indeed a contract in place at an earlier stage of the negotiations, if such a warning is issued in clear and unambiguous terms, the tour operator’s warning must be a factor that helps to feed the assumption made here that computerised communications made to a travel agent are likely in most cases to be firmly placed at the negotiations stage of the formation of the travel contract, especially as the existence of such a notice or warning would be good evidence that the parties to the negotiations had at least implicitly agreed as to the mechanism by which any contract should come into existence.

6.8 However, it is important to treat every situation on its own facts. In Bowerman v Association of British Travel Agents Limited,6an unusual case of a unilateral contract,7the travellers had purchased a skiing holiday from a company that went into insolvent liquidation, and sought a refund of the holiday price under an ABTA refund scheme. ABTA obliged with the refund, but deducted the insurance premium paid by the travellers. The travellers complained on the grounds that notices displayed by ABTA member travel agents had promised a full refund in the circumstances in which the travellers found themselves. The travellers argued that a full refund must include the insurance premium which ABTA had withheld. The Court of Appeal agreed. The travellers had made travel contracts with ABTA members partly on the strength of the promise contained in the Notice promising a full refund. The Notice was designed to attract travellers, and did attract them, to ABTA-secured holidays. The language of the Notice was in part colloquial, but travellers would take it to mean precisely what it said. In these circumstances the Notice was itself a contractual document offering the full refund in circumstances that applied to the travellers in question. That offer was held out to the whole world in respect of which it was only necessary for the traveller to buy an ABTA-bonded holiday in order to accept the offer. In other words, the ABTA promise was a unilateral contract and the travellers were entitled to enforce it in full.

Express terms

6.9 Apart from the terms implied by virtue of the Package Travel Regulations...

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