Who has the worst contract in travel?

By | May 9th, 2012

The devil is in these details. / Photo by Feathered Tar - Flick
Will the business with the most customer-hostile contract please stand and take a bow?

What’s that? Oh no, please, don’t all get up at once.

Airlines, with their super-restrictive contracts of carriage. Car rental companies, with their preposterous terms and conditions. Hotels, too. And cruise ticket contracts. Don’t even get me started on cruise contracts!

With the busy summer travel season about to start, the somewhat dry and always disappointing subject of contracts will become an issue. It does every year.

Reader David Deehl responded to a recent column in which I complained about travel companies that don’t deliver the products they promise, but force their customers to agree to onerous, one-sided “adhesion” contracts that sometimes result in the loss of their entire cruise, flight or hotel stay.

Deehl says the travel industry is full of them. And he ought to know: He’s an attorney.

Let’s go over a few of the “gotchas” by industry.

Airline. Your rights, such as they are, can be found in a document called the contract of carriage. Among other things, you agree that the airline isn’t responsible for getting you to your destination on schedule and that it owes you nothing if it loses your valuables. Got a problem with that? You’ll have to sue in federal court.

Car rental. Your car rental terms vary by state. In it, you agree that you’re responsible for the car, even if the vehicle is damaged by an Act of God, like a hailstorm or flood. You also agree to pay for whatever the car rental company thinks you’re responsible, like a “loss of use” charge it invents.

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Cruise. The ticket contract is an astounding rights grab. You give away your right to sue the cruise line and agree that the company can remove you from its vessels for any reason it wants to and deny you a refund. Maritime law, the law that governs the contract, favors the cruise line.

Hotels. The rules of your hotel stay are governed by state law, but you also sign an agreement at the beginning of your stay in which you agree to additional terms. Those can include paying a “resort fee” or agreeing to any late charge to your credit card (like a “cleaning” fee) the hotel decides to bill you.

Simply put, the deck is stacked against travelers.

What should a contract look like? Deehl likes restaurants.

“You do not have to pre-pay to get a reservation,” he says. “You do not pay until you are served and finish your meal, and you do not have to enter into a contract to give up your rights for the privilege of eating.”

Imagine that: paying for your flight after you land. Not giving up any of your rights, ever. Now that would be something, wouldn’t it?

So who’s the worst?

I’m leaning toward airlines. I deal with complaints every day, and the airline contracts truly allow companies to get away with almost anything. They can lose your luggage, deliver you to your destination late (or never) and offer the worst imaginable service along the way — and get away with it.

Deehl, who is an expert on maritime law, thinks cruise contracts are pretty awful, too.

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“They come up with onerous conditions, such as the total forfeiture of monies paid if they do not make it to the ship on time,” he says. “Then they sell expensive insurance which mostly just refunds what the cruise lines should be refunding anyway, and the other coverage is just a run-around with the cruise insurers interpreting the coverage against the law to make all the ambiguities favorable to the insurer so they do not pay.”

Cruise contracts also allow for some “incredibly unreasonable, negligent things” such as the Costa Concordia disaster, without paying customers for damages.

Is there a worst offender, though?

I put that question to University of Pennsylvania law professor Tom Baker. His answer: they’re all bad.

“The entire industry has one-sided contract provisions that penalize travelers whose plans change,” he told me, adding, “This is definitely an area where some consumer protection would really help.”

More laws? Yep.

“Ordinary contract law is not up to the challenge because courts typically enforce contracts as they are written,” he says. “And travel contracts are always written by travel service providers in a way that protects their interests — not the consumers.”

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