Travel Agents
| Author | Matthew Chapman/Sarah Prager/Jack Harding/Dominique Smith/Thomas Yarrow/Henk Soede |
| Pages | 75-94 |
Chapter 3
Travel Agents
INTRODUCTION
3.1 A precise and complete definition of the travel agent’s status in law has never been forthcoming. On the contrary, it sometimes seems that judges do the best they can to avoid the issue wherever possible. Where it becomes necessary to decide whether the travel agent was acting as an agent, and if so whose agent, the courts usually adopt a piecemeal approach for the purposes and on the facts of a given case, and in given circumstances. It is very easy to limit such authority as there is to the particular facts of the given case. In Bowstead & Reynolds on Agency,
3.2 The piecemeal common law approach to the status of the travel agent has its advantages – and as this chapter may demonstrate, the approach is probably justified. The fact of the matter is that the travel agent is a commercial chameleon, changing their colours according to the context in which they are viewed. It is therefore unsurprising that the courts have generally taken the view that they may act sometimes as an agent for the tour operator and sometimes as an agent for the traveller, even within the same transaction.
3.3 It is important to distinguish between two different situations. The first is where a party describes itself as a ‘travel agent’ (the most obvious examples being High Street shops). Where this happens, the travel agent may, in fact, be acting as an agent (and if so, either for the traveller or for the service supplier, or both) or as a principal, the title itself being inconclusive as to the role adopted. The second is where a supplier of services insists that it acts only as a booking agent, purporting to be neither a travel agent as such nor a principal, but merely a booking facilitator. Internet sites often fall into this category, as do telesales
Maxwell, London.
76 Saggerson on Travel Law and Litigation
specialists. It is a question of fact whether the agent of this second type has successfully avoided any liability as a contracting party.
3.4 Travel agents are variously:
ƒ ‘agents’ pursuant to written agreements with tour operators for the display and distribution of brochures and promotional literature;
ƒ travel consultants and advisers for the general public;
ƒ booking agents for the tour operators and other suppliers – particularly with regard to packages and holidays, but increasingly in supplying accommodation and other individual components;
ƒ stakeholders of money paid to them, which in turn must be transmitted to a service supplier, such as a tour operator, in due course;
ƒ ticket agents authorised to write tickets for bus companies, railways and ferries;
ƒ booking clerks making reservations for the traveller, even if not authorised to issue tickets (and here internet sales sites need to be careful that they are not unwittingly acting as principal contractor with the traveller).
3.5 Travel agents cannot be regarded as ‘commission’ agents in any traditional sense because, while they clearly earn commissions from the likes of the tour operators, they will often have a large number of principals for whom they are acting at any one time. With some exceptions, notably many internet providers, they are not usually tied to the products offered by a single supplier.
3.6 When a traveller books a holiday through a travel agent, it will often be necessary to ask whether the latter acted as agent for the traveller or for the supplier of services at a particular point (or points) in the transaction. It would be too simplistic, and wrong, to suppose that a travel agent acts as agent either solely for the service provider or solely for the traveller. Instead, it is necessary to examine each transaction, and each identifiable point within each transaction, in the light of the evidence that is available, in order to determine for whom the agent acted at that particular point. The answer in some circumstances may well be that the travel agent was not acting as an ‘agent’ at all, particularly when exercising its ‘consultancy’ functions.
Agency is the relationship which exists between two persons, one of whom expressly or impliedly consents that the other should represent him or act on his behalf, and the other of whom similarly consents to represent the former or so to act.
3.7 The person who agrees to be represented or to have another act for them is the ‘principal’.
3.8 Agents act under express or implied authority. Where the principal’s consent to have the agent act for them is manifested directly to the agent, either expressly or implicitly, the agent’s authority is actual authority. Where, on the other hand, the principal’s manifestation of consent is made to third parties (for example, consumers), the authority of the agent is apparent authority. Actual authority and apparent authority can, and do, often overlap, but it is possible for an agent to have apparent authority by reason of the way in which the agent has been represented to third parties by the principal, without necessarily enjoying actual authority. Accordingly, an agent may still bind its principal even though the agent acts outside the scope of its actual authority in circumstances where the principal has represented to the world at large by their words or conduct that the agent can so act. For this reason, it is of paramount importance to suppliers that they control the representations made by their agents; and most agency contracts are draconian in their attempts to circumscribe the freedom of agents to make representations and to enter into contracts with third parties.
Agency and packages
3.9 Irrespective of whether or not the Package Travel Regulations 2018 apply to a particular holiday, holiday contracts are governed first and last by the ordinary principles of English law, including the law of agency. In ABTA v CAA,
Goldring J has commented:
In my view, whether the agreement links the consumer to the organiser or retailer or both depends upon the application of the English law of contract, in particular the law of agency ... If by application of the English law of contract the retailer is liable under the contract between him and the consumer, he cannot escape his liability by blaming the lack of proper performance of the obligations under it on someone else. For, additionally, he is responsible for the proper performance by others who may supply services under the contract ... In short, that there may be such an additional
Maxwell, London, article 1.
GENERAL PRINCIPLES OF AGENCY
78 Saggerson on Travel Law and Litigation
obligation upon the retailer does not mean that the normal English law of contract has no relevance. It means that in the case of the sale of a package, the retailer cannot escape liability by pointing to someone else’s failure: that he must provide sufficient bonding to give that obligation value.
3.10 Before one can determine whether a particular party is responsible for the provision of ATOL security protection or is liable as a contracting party with a traveller, it is essential to determine whether the party identified is contracting as a principal on its own account, or as an agent on someone else’s account. Unhelpful though it may be, the answer is inevitably one of fact, degree and evidence. The fact that a party labels itself as only an ‘agent’ is far from conclusive; it will almost always be in the interests of a commercial entity to do so, but it cannot escape liability simply by misrepresenting the true nature of its relationship with the traveller. The extent to which the factual background is important and the parties’ stated intention can be unimportant is nowhere better illustrated than in International Life Leisure Limited v Revenue & Customs Commissioners.
(a) The first contract took a standard form where L agreed with private individuals to let their properties. Under the terms, L had to pay any cancellation charges that might become due to the accommodation provider and it was authorised to set the rental rates for the accommodation to be paid by holidaymakers.
(b) The second contract offered accommodation through a large number of hotels. L was allocated a set number of rooms but neither acted as sole agent nor guaranteed any payments before bookings were secured. Again, L was responsible for cancellations and was under no obligation to inform the accommodation owner of the amount it charged for the rooms.
[2006] 7 WLUK 314.
(c) In the third contract, L again made its profit by...
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