Unfair Terms in Package Travel Contracts

What terms do I need to look out for when signing up for a package travel contract?

Package Holidays

When many people arrange to go on holiday they do so by purchasing a package from a travel agent which will consist of one or more of the following elements:

  • Flights
  • Transfers to and from the airport
  • Accommodation
  • Activities while they are abroad

Is there any legislation which governs these kinds of contract?

All those people and companies who supply and promote travel packages must be aware of the laws specified by the Package Travel Regulations 1992. These Regulations therefore provide the guidelines by which an individual or a business can sell travel packages and the certain rules which they must adhere to.

Is there any legislation which is in place which is designed to protect the purchaser of the package?

Often when signing up to a package travel contract the purchaser or consumer will be required to sign the terms and conditions of sale for that business before the final contract for the package holiday has been formed.

If any of the terms included in this standard contract or terms and conditions do not reflect what the business obligations are under the Package Travel Regulations then it is likely that those conditions will be regarded as unfair using the Unfair Terms in Consumer Contract Regulations.  This will be the case if the standard term is of the type which could potentially mislead the consumer when signing up to the travel package.

What happens if a term is found to be unfair under the Unfair Terms in Consumer Contract Regulations?

If a term is found to be unfair under the Unfair Terms in Consumer Contract Regulations then it will become void and that consumer will not be bound by it even if they have signed the contract.

What is meant by a standard contractual term?

When signing up for a package contract in this manner it is unlikely that a full contact will be drawn up which needs to be signed by both parties. What is usually the case is that the consumer will be required to fully read the companies standard terms and conditions of sale and show your agreement to them. If you purchase the package in the travel agents you will be provided with a hard copy of the terms and conditions and will be required to sign it at the bottom before you can proceed with the purchase.

If you purchase the package online through a designated travel package website then you will be required to state that you have read and understood the terms and conditions prior to being able to enter your credit card details.

Within these terms and conditions will be various terms which are in place to protect the interests of the travel agent rather than the consumer, such as the consumer accepting liability for damages which may occur from actions by the consumer while on the actual package holiday.

The important thing to note regarding these kinds of terms is that they are agreed unilaterally. This means that you do not have a say in these terms. They are put in place by the business and if you do not agree to be bound by them then you will not be able to purchase the holiday package.

Due to the unilateral nature of these terms it is imperative that there is some protection put in place for the consumer.

How will a term be held to be unfair?

There are two things that will be taken into consideration by a court when trying to establish whether a term is unfair. These are as follows:

  1. The test of fairness
  2. The plain language requirement

The test of fairness and the plain language requirement

A standard term in a consumer contract will be regarded by the court as unfair if it creates a significant imbalance in the rights and obligations of the parties who have entered into the contract.  For the term to be unfair in relation to the consumer then this imbalance in the rights and obligations must be to the detriment of the consumer and contrary to the requirement of good faith.

What is meant if the term is said to be to the detriment of the consumer?

If a term is said to be to the detriment of a consumer then it will mean that the rights of the consumer have been put at an imbalance due to the term affecting their rights more so than the right of the business.

What is the requirement of good faith?

The requirement of good faith means that business must deal in a fair and open manner with all of their customers.

When a standard term in a consumer contract is drafted the terms must be fair and simple and not adversely affect the rights of the consumer. This means that they can still serve their purpose of protecting the business needs and interests of the package travel business but they must also be fair to the consumer.

According to the Unfair Terms in Consumer Contract Regulations a standard term, in assessing whether a term in fact unfair, the following things must be taken into account:

  • The nature of the goods or services
  • All the circumstances involved in the making of the contract
  • The other terms in the contract
  • The language in which the term is written

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For more information on:

  • As a consumer are there any terms which I should potentially look out for?
  • The transferability of the contract
  • In what circumstances may I do this?
  • What about cancellation provisions?
  • Acceptance of responsibility for statements made by travel agents
  • Responsibility for errors in travel brochures