17.01.14

Under-promise and Over-deliver: Liability for Spoiled Holidays

While reading your travel agency’s holiday brochures, you see in bold print: There is no greater place to spend your Christmas holidays than in Utopia! Its majestic blue mountains will tip you off to what you can expect on this thriving island of fun, sport and excitement. Better yet, you do not have to set one foot outside the Utopian Resort & Spa to experience Utopia’s vivacious culture, warm beaches and tantalizing local cuisine, which will undoubtedly put your mind at ease! 

Utopian Resort & Spa captivated your interest. You salivate a little. You immediately use your Christmas bonus to book a 2-week holiday for you and your family. You get to the Resort but it comes nowhere close to the description in the brochure. You are disappointed and distressed. 

Legal recourse for spoiled holidays 

Unfortunately, this scenario is not uncommon. Yet many people would treat this experience as a bad bargain that affords no remedy. But there is legal recourse for the disappointed holidaymaker if it becomes necessary. In a number of cases decided in the United Kingdom and other jurisdictions, travel service agencies have been held liable to compensate their customers for spoiled holidays. This liability arises from the legally binding holiday contracts between the travel agencies and their customers. These contracts generally have the object or purpose of providing the customer a holiday of relaxation or enjoyment. In those cases, the travel service agencies were found to be in breach of contract when the holiday did not match up to its description and resulted in disappointment and distress to its customers. 

This position runs contrary to the general common law rule that damages for breach of contract will not generally be recoverable for injured feelings, disappointment or distress which is unaccompanied by physical inconvenience. Nevertheless, the availability of contract damages for distress in holiday cases is now well settled at common law. 

What is recoverable? 

On a successful claim, compensation is generally assessed under three (3) heads. First, the holidaymaker can recover the difference between the holiday that was promised and that which was actually provided. If the holiday costs $1,000,000 and the actual holiday received is worth only $500,000, compensation should be the difference of $500,000. 

Second, additional compensation can be obtained for any distress, disappointment or frustration that a holidaymaker experiences. In that assessment, the mental distress of the entire family will be relevant as the contract was also made for their benefit. The courts have noted the difficulty in putting a dollar figure on mental anguish and the approach is mainly guesswork. In arriving at a figure, the facts of each case will be taken into account. 

Finally, reasonable out-of-pocket expenses incurred as a result of the breach of the holiday contract may also be recovered. 

Legislative Framework 

The Consumer Protection Act, 2005 has provisions that could be applicable in holiday cases. Section 28(1) prohibits persons involved in a trade or business from engaging in misleading or deceptive conduct. Section 30(1) prohibits false representations that goods or services are of a particular standard or quality. These sections seem to require either a deceptive intent on the part of the travel service agency or a degree of knowledge of the impending holiday dystopia. While perhaps not many cases will rise to this degree of deception, it is still important that both travel service agencies and their customers are aware of these legislative prohibitions. A fine, imprisonment, or both, will be imposed if either of these sections is contravened.

Any recourse for the travel service agency? 

In all cases for breach of contract, the aggrieved party should take reasonable steps to reduce the losses flowing from the breach. If a holidaymaker acts unreasonably in all the circumstances, he will not be compensated for those losses that could reasonably be avoided. The yardstick is reasonableness and the law will not countenance petulant holidaymakers who are particularly hard to please. It is also eminently sensible that a travel service agency will not normally be liable for a holiday affected by the forces of nature or other events beyond its control.

In any event, travel agencies ought to be more cautious when contracting to provide holidays. The saying goes that it is best to under-promise and over-deliver. This is not merely a mantra for the travel service industry; it is a tactic that could ward off potential litigation. At the very least, travel service agencies should only promise what they can deliver.