Search

HOLIDAY LAWS: REMEDIES FOR BREACHES.

INTRODUCTION:


When one of the parties to the contract commits the breach of such contract then the other party, against whom the breach is committed, is entitled to a remedy. The Court of Law will ask the party who has committed the breach, to restore the position of the party against whom the breach is committed to his original position or to the position where he would have been if no contract was entered into. The most common remedy for a breach of contract is in the form of ‘Damages’.


Damages refer to compensation - such as a monetary judgment - provided to a person who has suffered a loss or harm due to the unlawful act or omission of another.

The second remedy available to the party against whom the breach is committed is the ‘right to terminate the contract’. This remedy can be availed only if there has been a ‘Breach of Condition’ and not a ‘Breach of Warranty’. Regulation 9 of The Package Travel Regulation, for instance, states that if the tour operator does not give a written copy of all the terms of the contract to the consumer, then it will amount to ‘Breach of Condition. Again, Rule 6 of The Package Travel Regulation states that all the particulars given in the brochure are warranties. Apart from this, the parties themselves are generally free to classify the terms of the contract into conditions and warranties depending upon the importance they want to associate with them.


The main object of this prior classification of the terms of a contract into conditions and warranties are that if any breach occurs then the parties to the contract will know immediately where they stand. If a ‘breach of condition’ is done then the party against whom such breach is committed holds the right to terminate the contract and claim for damages, and if a ‘breach of warranty’ is committed then the party against whom such breach is committed, can claim for damages but cannot terminate the contract.


Besides the above-mentioned remedies, the other remedies such as ‘specific performance’ and ‘injunctions’ are highly unlikely to be awarded in package holiday case. These remedies are generally awarded by the Court only when damages would not be appropriate, where the subject matter of the contract is unique and where there is no element of personal service involved. But, Regulations 13 and 14 of The Package Travel Regulation, do provide remedies that are similar to ‘specific performance’ and under Regulation 14 of The Package Travel Regulation, there is a further remedy which requires performance in kind rather than cash. Regulation 13 states:


13.-(1) The terms set out in paragraphs (2) and (3) below are implied in every contract and apply where the consumer withdraws from the contract pursuant to the term in it implied by virtue of regulation 12(a), or where the organiser, for any reason other than the fault of the consumer, cancels the package before the agreed date of departure. (2) The consumer is entitled— (a) to take a substitute package of equivalent or superior quality if the other party to the contract is able to offer him such a substitute; or (b) to take a substitute package of lower quality if the other party to the contract is able to offer him one and to recover from the organiser the difference in price between the price of the package purchased and that of the substitute package, or (c) to have repaid to him as soon as possible all the monies paid by him under the contract.


Similarly, Regulation 14 of The Package Travel Regulation, 1992, states:


14.-(1) The terms set out in paragraphs (2) and (3) below are implied in every contract and apply where, after departure, a significant proportion of the services contracted for is not provided or the organiser becomes aware that he will be unable to procure a significant proportion of the services to be provided. (2) The organiser will make suitable alternative arrangements, at no extra cost to the consumer, for the continuation of the package and will, where appropriate, compensate the consumer for the difference between the services to be supplied under the contract and those supplied. (3) If it is impossible to make arrangements as described in paragraph (2), or these are not accepted by the consumer for good reasons, the organiser will, where appropriate, provide the consumer with equivalent transport back to the place of departure or to another place to which the consumer has agreed and will, where appropriate, compensate the consumer.


DAMAGES:


In Holiday cases, damages are awarded under two broad headings:


Difference in value between what the client was promised and what he actually received and the Consequential loss he suffered further by the breach of contract. The second heading, i.e., the consequential loss, covers very wide ambit of losses under it. It covers everything including damages for pocket expenses, mental distress, physical discomfort and personal injury.


Calculation of damages for pocket expenses, physical discomfort and personal injury is can for once be calculated but the damages for mental distress cannot be fixed. It can only be calculated based on the facts and circumstances of the case.


The main objective of awarding damages for the breach of contract is to put the plaintiff in the same situation, as he would have been in, if the contract was performed.


DIFFERENCE IN VALUE CLAIMS:


This basically means that the plaintiff will be awarded the difference between what he was promised and what he actually received. In the case of McLeod v. Hunter [1987] C.L.Y. 1162, 439 Euros was awarded when the defendant substituted a cramped apartment for a luxurious villa. This was in addition to a sum for distress and disappointment.


CONSEQUENTIAL LOSS-OUT OF POCKET EXPENSES:


This is awarded in form of damages for the reasonable out of pocket expenses of the client which he did not plan to spend and which incurs because of the breach by the tour operator. In case of Harvey v. Tracks Travel [1984] C.L.Y. 1006, the plaintiff genuinely had his salary deducted because a flight delay or overbooking made him late back for work. He got the damages for his loss.


CONSEQUENTIAL LOSS- MENTAL DISTRESS:


This head of damages got in existence by the case of Jarvis v. Swans Tours [1973] 1 All E.R. 71. In this case, on the novel question of mental distress, Lord Denning M.R. said:

“In a proper case damages for mental distress can be recovered in contract... One such case is a contract to provide entertainment and enjoyment. If the contracting party breaks his contract, damages can be given for the disappointment, the distress, the upset and frustration caused by the breach.” Damages for Mental distress differs from case to case on the gravity of the situation. Holidays are planned for physical relaxation and mental repose. And if this is disturbed because of the glitches in the holiday package then the tour operator will be liable to pay the damages fixed by the Court.


CONSEQUENTIAL LOSS- PHYSICAL DISCOMFORT:


Damages can be claimed for a breach of contract, which consequentially results in physical discomfort. In the case of Cook v. Spanish Holiday Tours, The Times, February 6, 1960, C.A. the plaintiffs were awarded 25 Euros as damages for disappointment which included a sum to compensate them for the inconvenience of having to spend the first night of their honeymoon on a perk bench.


CONSEQUENTIAL LOSS- PERSONAL INJURY:


Damages for breach of contract causing personal injury can be claimed by the client but the burden of proof will lie on him. In case of Wall v. Silver Wing (1981) H.C., the plaintiffs would have been awarded the damages had they been able to establish the liability.


REMOTENESS OF DAMAGE:


In the landmark case of Hadley v. Baxendale, the principle of remoteness of damage was laid down. Like in the cases of Torts, no damages are provided if the damage is remote, here also if the damage is too remote to be connected to the direct circumstances of the case, no damages will be awarded. So, a tour operator will have to pay damages for breaches which are within reasonable contemplation of the parties but not otherwise.


CANCELLATION BY THE CLIENT:


When after the booking of the package, the client cancels the tour, the company suffers loss. For this reason most operators incorporate a clause in their terms and conditions stating that if the booking is cancelled by the client, then he must pay a compensation to the tour operator. These conditions differ in various agencies. The amount of compensation to be paid by the clients in case of cancellation of the booking might differ. Usually the charges are on a sliding scale commencing with just the deposit and getting larger as the date of departure draws near and ending up with a charge of 100 per cent on or about the actual date of departure.


The main object for incorporation of such clauses in the terms and condition is to protect the interest of the tour operators.


Where the cancellation is regarded as breach of contract by the client and the damages to be paid by the client for cancelling the booking are liquidated damages, then this cancellation clause will be placed in the first category. These will be enforced unless they amount to penalty.


The second category clause enables the client to choose for terminating the contract and if he chooses to exercise this option then the contract provides that he must pay the cancelation charges. This means that the contract is not being breached by the client, he is merely exercising his rights. The sum he pays does not amount to damages for breach.


CONCLUSION:


As far as the remedies in case of breach of contract for the travelers are concerned, they are very elaborately mentioned in the Regulations 13 and 14 of The Package Travel Regulation, 1992. It has been made sure that travelling is made a lot more happy and delightful. But, the tour operators are not left out. They have their remedies in case of breach of contract by the clients. They are provided with proper remedies in case of cancellation of the travel booking by the clients.



Author: Navin Kumar Jaggi

Co-Author: Harshraj Shakdupia

3 views0 comments