What is the law of travel agency and what do you need to know? Part 4: what is the relationship between the travel agent and consumer?

This article was first published in Travel Weekly on Tuesday 11 May 2021.

In this fourth and final part of our overview of the law of travel agency, we explain the relationship which exists between the travel agent and the consumer.

Previous parts

• Part 1: the basics of an agency relationship
• Part 2: how do I become a travel agent, and what if I create package holidays?
• Part 3: what is the status of the principal in travel agency contracts?

The relationship between a travel agent and the consumer

Travel agents have been described as “commercial chameleons”, whose roles can change even during the same transaction. For instance, in a single transaction it is possible for a travel agent to act in a number of different capacities:

• Travel advisor: The travel agent may assume the role of a professional advisor, taking instructions from the consumer as to their requirements and/or special needs and then advising the consumer as to where to go, where to stay, the best travel arrangements to make, and so on.
• Marketing agent for principal: The travel agent may be appointed as a marketing agent for a principal (e.g. a tour operator), where it is appointed to promote the principal’s holiday to the consumer.
• Sales agent for principal: The travel agent may be appointed as a sales agent for a principal (e.g. a tour operator), where it is appointed to conclude the holiday sale for the principal and to arrange for the consumer to enter into a contract with the principal.
• Agent for the consumer: The travel agent may be appointed as an agent for the consumer when concluding a booking with a principal for which it is not formally appointed (e.g. when booking low cost flights).
• Service provider: A travel agent may provide the consumer with a technology platform which enables the consumer to make bookings with principals. In this context, the travel agent is not likely to be acting as an “agent” in the true sense of the word. Rather, it is acting as a principal in the provision of a booking service to the consumer.
• Post-booking agent for principal: A travel agent may be appointed as an agent for the principal in dealing with post-booking matters. This might include collecting balances from the consumer, managing amendment and cancellation requests by the consumer and issuing travel documentation to the consumer.
• Post-booking agent for the consumer: A travel agent may be appointed as an agent for the consumer in dealing with post-booking matters. This will include remitting balancing payments to the principal, making amendment and cancellation requests on behalf of the consumer and passing on travel documentation to the consumer.
• Organiser: A travel agent may be an organiser of package holidays if the agent is responsible for creating the consumer’s package holiday.

In order to identify the duties owed by a travel agent to a consumer, it is first necessary to identify the capacity in which the travel agent is acting towards the consumer, which may vary at each point in the transaction. Its duties will then be defined by reference to this capacity and the terms of any contract which may exist between the travel agent and the consumer.

The analysis we have described above will, of course, depend upon a careful analysis of the facts and circumstances of a particular transaction. However, we would suggest that an agent is likely to owe the following duties to the consumer:

• Travel advisor: A travel agent is likely to have duties under the law of tort to exercise reasonable skill and care in delivering advice to the consumer.
• Agent for the consumer: A travel agent will likely owe duties to the consumer under the agency agreement and/or under the common law of agency. We would expect these duties to include a general duty to exercise reasonable skill and care to the consumer, which in practical terms is likely to include (this list is not exhaustive):
  • Holding the consumer’s money securely;
  • Using the consumer’s money to pay the principal;
  • Making accurate bookings with the principal;
  • Making amendment and cancellation requests on behalf of the consumer;
  • Promptly sharing with the consumer all information and documents supplied by the principal;
  • Ensuring that the consumer is made aware of all terms and conditions which relate to the booking with the principal; and
  • Not making a secret profit (i.e. booking fees must be disclosed).

• Service provider: the terms of a booking service provided would typically be set out in a written agreement. We would anticipate these to be similar to those described above for an agent for the consumer.
• Organiser: the travel agent will, of course, have to adhere to the duties set out in the Package Travel and Linked Travel Arrangements Regulations 2018.

If a travel agent acts as an agent for the principal, it will in general have no liability to the consumer in relation to the performance of the travel services (unless, of course, the travel agent is also an organiser). Provided that the travel agent is acting within the scope of its actual or apparent authority, the travel agent’s acts will be taken as those of the principal and no claim will lie against the travel agent. Further, there is an implied duty at common law on a principal to indemnify an agent against all liabilities incurred by the agent in the performance of lawful acts within the scope of the agent’s authority. The consumer must, usually, therefore, bring its claim against the principal. However, there may be particular circumstances in which the travel agent may be so liable, including:

• Collateral contract: in spite of the consumer’s claim lying against the principal under the contract for the supply of the travel service, it is possible that the travel agent may have agreed separate contractual obligations with the consumer. This might include, for instance, a situation in which the travel agent has offered credit to the consumer to pay for the holiday. It might also include more basic obligations set out in the travel agent’s contract with the consumer (e.g. in relation to handling amendment and booking requests). The agent will be bound by these obligations.
• Breach of promise of authority: where an agent enters into a contract on behalf of its principal, it is taken to promise that it has the authority to do so. This is generally taken to be a contractual promise, and so if it transpired that the travel agent did not have the authority to make the contract, the consumer could bring a claim against the travel agent on this basis.
• Tort: the agent may be liable in tort on general legal principles.

Conclusion

We hope you have found our four-part overview of the law of travel agency helpful and clear. It is, as one can see, an area which can be complicated because of the various roles which travel agents fulfil and the lack of clarity which typically exists in structuring the travel agent’s role in the first place. These are complications which can be resolved through some clear thinking as to the travel agent’s role, and contractual arrangements which mirror the intended structure.