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Students Assignment Help April 1, 2016

Assignment on Australian Contract Law: Review of a Holiday Package

Executive Summary

This report has been prepared for the purpose of providing appropriate advice to the management of the advertising company on the legal effect of the representations on the holiday brochure before it is sent for printing. For this purpose, a brochure of holiday package by Thompson Group has been selected and analysed in order to identify the key information about the holiday as provided in the brochure, categorise the information about representations,

terms, conditions and warranties on the basis of principles of Australian Contract Law and identify if there is any material in the brochure that is misleading, unconscionable or involves false representation and bait advertisements. In addition, the effects of the representations associated to laws related to consumer and consumer protection. The validity of exclusion and limitation clauses has been explained with the help of the principles of contract law.

Introduction

A holiday package consists of transport and accommodation which is promoted, advertised and sold by a vendor who is known as a tour operator. The tour operator may also provide other services as rental car, organise activities during the holiday. Holiday packages are a form of product bundling aiming to offer a consortium of services to the customer. The tour operator presents the information, details of the holiday package and the associated terms and conditions in the brochure.

In the context of the information provided in the brochure it is essential that the provisions of the holiday package abide by the Australian legislation related to contract law and consumer law. In respect of legal evaluation of a holiday package, the holiday package brochure of Thompson Group has been undertake to analyse its representations, warranties, terms and conditions in respect of Australian Law.

Thomson is one of the recognized holiday planner companies that provide holiday packages to the customers at reasonable price. The company believes in providing valuable and customize services to the customers and thus has develops a distinctive brand image in the minds of the customers (Thomson Group, n.d.). The holiday packages provided by the company are customized to achieve customer satisfaction and provide special packages to families, couples and individual persons as per their needs and requirements (Carter and Harland, 2004).

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Analysis of the Brochure in order to identify the Legal Issues

The Australian Consumer Law (ACL) 2011 is a single national law that governs consumer protection and fair trading practices in Australian territory. The law is applied as a law of the Commonwealth and is a schedule to the Competition and Consumer Act 2010 (The Australian Consumer Law. 2010). The law is principally concerned with protecting the interests of consumers of goods and services against unfair trade practices and providing appropriate remedies to protect the consumer where breach of Australian Consumer Law takes place.

The major functions of ACL are firstly, to protect the interests of consumers against unconscionable conduct of traders, misleading conduct, false representation and unfair trade practices; secondly, provides standards for safety; thirdly, establish manufacturers’ liability and lastly, establishes product liability (The Australian Consumer Law. 2010). In this respect of evaluating the legal relevance of Holiday Brochure, the analysis has been made on the basis of five key tests namely, unconscionable, misleading, false representation, bait advertisement and offers and prices.

These elements have been discussed in Chapter 2 of the Trade Practices Amendment Act (2010). Part 2-1 has explained misleading conduct by stating that a person must not be engaged in trade or commerce that is deceptive or misleading. Part 2-2 has explained unconscionable conduct and has stated that a person must not be engaged in trade or commerce that is unconscionable. Part 2-3 has explained that a contract will be invalid if the term of the contract is unfair. Part 3-1 of Chapter 3 has explained bait advertisements under unfair practices. Paragraph 12DE (1) (b) has elaborated on the offers, gifts and prizes offered in the contract (Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010).

Key Information related to the Holiday Package as stated in the Brochure

The brochure incorporates the information regarding the type of holiday services given by the company. The details given in the brochure relates to the information regarding the country to which the company plans holidays for its customers. In addition to this, all the information for the days for which the trip is planned is also provided in detail in brochure (Thomson Group, n.d.). The holiday package in this brochure is trip to Spain, Portugal and Cape Verde for about 25 days.

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The customers, in this context, are provided complete information to be reviewed for planning their holiday vacations for a trip to the destinations mentioned in the brochure. The company must also enclose the information relating to secure funding, placement, maps and layout, inclusions and exclusions of the trip, disclaimer of the company and the reliabilities, the liability of the company, Image selection, the promotional copy, details of the itinerary and other extra benefits that the company is providing to the customers.

These all the information are compulsory for the holiday planner companies to provide to the customers in the brochure. Thus, it is necessary for the holiday companies to disclose all the information and not hide any relevant facts with the customers as per the Australian Contract Law. Australian Contract law governs and regulates all the contracts that deal with the exchange of goods and services. Thus, holiday companies are entitled to provide their services as per the rules and regulations of contract law, consumer law and protection law (Corones, 2011).

The main information that is provided in the holiday brochure can be described as follows:

•Duration of the trip: 25 days and 24 nights.
• Destination: Trip to Spain, Portugal and Cape Verde
• Travel inclusions: Air and road Transport facilities within the trip.
• Travel dates: 1st December to 25 December.
The travel and the itinerary:
• 1st to 5th December – Balearics (Ibiza, Menorca and Majorca)
• 6th to 10th December – Canaries (Side, Alanya, Manavgat, Belek, Lara Beach, Lara, Kemer)
• 11th to 16 December – Mainland Spain (Altinkum, Bodrum, Turgutreis, Gundogan, Gumbet, Bitez)
• 17thto 20th December – Portugal (Kusadasi)
• 21th to 25th December– Cape Verde Islands (Sunny Beach, Obzor Beach)

Thus, all the customers who are buying this holiday package will visit all the destinations mentioned above within the duration of 25 days. Holiday brochure given by Thomson Group to the customers also encloses complete detail regarding the entire holiday package on different pages (Review of Australian Contract Law, 2012).

The brochure contains the description of each destination in order to give customers an overview regarding the type of place they will be visiting during their holiday trip. In addition to this, complete detail regarding the accommodation facilities and other services provided by the company during the trip is also provided in detail in the brochure. Thus, the brochure reveals all the terms and conditions of the trip so that customers can make decisions whether they want to enter a contract with a company as per the terms and conditions of the contract law (Review of Australian Contract Law, 2012).

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The company has also provided details regarding the type of plan the hotel will be offering to the customers. The hotel includes a Continental plan (CP), European Plan (EP) or Modified American Plan (MAP) for the customers in the hotel where they will be accommodated. Continental plan states that breakfast is included in the plan, European plan means that the plan provides only the accommodation facilities and MAP plan means that breakfast, lunch and dinner all are included n the plan in addition with the accommodation facilities provided by the company (Bonell, 2009).

The company provides by default continental plan to the customers but the customers can choose their plan as per their needs and requirements. All the information regarding the extra charges that the customers have to pay in selecting an additional plan is also provided in the holiday brochure of the company (Bonell, 2009).

Complete details regarding the type of transport facilities that is provided in the trip is also included in the brochure. This includes information regarding whether the transport will be provided by the car or Volvo or by air. In addition to this, the time taken in traveling from one place to another and the distance covered is also provided in detail in the company brochure. Also, the monuments and historical places planned to be visited during the trip is mentioned clearly in the brochure.

Brochure, in this relation, also mentions that travel agency is the subcontractor for transporting customers and their luggage from one place to another. All the details of the contract made between the Thomson and the travel agent is mentioned in the brochure. Moreover, the details like dates of journey, places to be visited during the trip i.e. inclusions and exclusions, mode of travel, room plans, hotel details and the overall itinerary are also provided in the brochure (Review of Australian Contract Law, 2012).

Classification of the statements into representations, warranties, terms and conditions in the brochure using principles of Contract Law

Contract law provides a framework for regulating the enforceability of promises and also includes freedom o contract, agency relationship and limitation of actions. Australian Contact law is based on common law and is derived from the decisions of the court. Consumers have access to extra legal protection in Australia and consumer law in some cases is given importance over the contract law.

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In addition to this, Australia have adopted and implemented an Australian Consumer Law (ACL) in all forms of contract for protecting the rights of the consumers. The act is adopted by all the states and territories of Australia. Australian Consumer Law describes the unfair contract terms and deceptive or misleading conduct (Latimer, 2012).

Download PDF(Assignment on Australian Contract Law Review of a Holiday Package)
In respect of the warranties and conditions associated to Thomson Group’s Holiday Brochure, the major conditions and warranties have been enumerated below:

•On the basis of the provisions stated under The Package Travel, Package Holidays and Package Tours Regulations, Thompson Group ensures that it provides a security for the monies paid by the customers while booking holiday package in the event of their solvency.
• The prices advertised are accurate and applicable on the dates published in the brochure, however, the Thompson Group reserves rights to change the prices from time to time (Terms and Conditions. N.d).
• Offers will not be combined unless it has been expressly stated in the Brochure and can be withdrawn anytime.
• Adequate and valid travelling insurance is a compulsory requirement for all travellers.
• All customers are required to exhibit reasonable skill and care while making any claim against the services and facilities offered by the Holiday Brochure as the company strictly follows its obligations towards its suppliers of services and facilities (Terms and Conditions. N.d).

In the context of the warranties associated with Thompson Group’s Holiday Brochure it can be said that some express contract terms are considered to be more important than others. These are called major terms. Less important terms are called warranties. Whether the term is a major or a minor one affects what you can do about the breach of contract.

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The details given in the holiday brochure can be analyzed on the principles of Australian Contract Law can be stated as follows:

•Complete detail regarding the places to be visited during the trip is provided in the brochure
• Images of all the places are also clearly mentioned in the holiday brochure.
• Method of payment and other finance related activities is also clearly stated to the customers.
• All the relevant charges for services provided by the holiday company are provided to the customers in detail.
• All the details of the offers and gifts is provided to the customer in the holiday brochure of the company.
• All the inclusions and exclusions are clearly defined in the brochure.
• Liability and responsibility of the company is also mentioned in the holiday brochure.

According to the Australian Contract Law, the parties are required to have intended the term of contract to be promissory in nature. This provision of law can be explained through the case of Ellul and Ellul v Oakes (1972) 3SASR 377 wherein the Elluls has bought a property form the Oakes and while undertaking the transaction, they relied on a statement stated in the listing form of the real estate agent that the property was severed. This form was signed by Oakes.

The concerned property was not severed and Elluls could claim the damages for breach of contract as the court ruled out that the parties must have intended the term of contract to be promissory in nature (Terms of a contract, 2013). The provisions associated to the brochure of Thomson illustrate this feature thereby meeting the requirements of the law.

The details provided by the company in the brochure must be completely fulfilled on entering into a contract of holiday package with the customers. The company is bound to provide all the services at the same price as mentioned in the brochure on entering into a contract. The company on entering into a contract by signing an application form with the customers to provide applicable services to the customers. Both the parties on signing the contract are bound to each other for carrying out the contact (Latimer, 2012).

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This is regarded as valid agreement between both the parties and they cannot deny the facts and are bound to fulfil the terms and condition of the contract. Thomson Group is bound to provide all the services that are mentioned in the brochure and customers are bound to pay the charges that are mentioned in the brochure. The company should also collect the passport and other identification details of the customers that have applied for the holiday package. In addition to this, the company has also stated in its disclaimer that all the customers are responsible for their own safety and thus they should take proper precautions during the travel.

However, the company has stated in its brochure will take the full responsibility of any mishap that occur during the trip. Thus, this implies that any personal harm or damage caused to customers due to theft etc is not covered in the terms of contract (Cartwright, 2014).

CONDITUONS AND WARRIENTIES IN HB

Identification of potentially harmful material in the brochure (LAW AND SECTIONS OF AUSTRALIAN CONSUMER LAW)

The section 29, of schedule 2 of the Competition and Consumer Act 2010 states that any contract that permits one party, but not another, to limit the performance of the contract, to, terminate the contract, to vary the terms of contract, to assign the contract to the detriment of another party without the other party’s consent; or limit one party’s right to sue another party, evidence that one party can produce in proceedings related to the contract; or imposes a evidential burden on one party in respect of the proceedings associated with the contract will be considered to be involved in false or misleading representations.

Thus, on analysis and examination of the information that is described in the brochure it can be said that there is no misrepresentation of facts or false information given in the brochure. However, some information that was found to be misleading can be stated as follows:

• The images of the destination are edited to make it more attractive for the customers.

• Company has stated in the brochure that a gift would be given by the company to one lucky customer which is wrong practice to be inculcated for attracting the customers for taking the holiday package.

• Some information is neither concealed nor properly disclosed to the customers and is referred that the information will be provided to the customers after entering into contract.

• The company has provided all the information that makes it attractive for the customers to buy the package and thus used false advertising practices for luring the customers.

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dentification of the Validity of the Exclusion and Limitation Clauses in the basis of Australian Contract Law

Thomson Group in its holiday package has excluded certain services that are not provided to the customers during the trip. The main exclusions include expenditure involved in causing damage to the hotel during stay, transfer charges to the entertainment places during the leisure time etc. All the expenditures will be charged separately from the customers and is not likely to be bearable by the company (Gillies, 2004).

The section 7 of Unfair Contract Terms related to exclusions and limitations states that the company is limited to provide the expenses that are covered in the holiday package and any personal expenditure of the customers is not likely to be bearable by the company at any cost (Exclusion Clause, n.d.). Thomson has clearly stated all inclusions and exclusions clearly in the brochure so that customers cannot claim on their part any misrepresentation of information.

Thus, all the inclusions and exclusions are necessary to be disclosed by the company in accordance with the contract law. ThomsonGroup, in accordance with the contract law, has clearly defined that all the expenses that are mentioned in the exclusions are not likely to be payable by the company (Gillies, 2004).

In relation to the presentation of the information in brochure, a case can be evident in Australian legal system. The Case titled as, The Mikhail Lermontov or Baltic Shipping Company v Dillon [1990] 1 Lloyd’s Rep 579 and (1993) 176 CLR 344 shows the plaintiff and victim’s position in the case of misrepresentation of information in the brochure (Goldring, J., et al, 1998). As per the case specifications, Mrs. Dillon had to face some critical injuries due to ambiguous and missing information regarding limited liability for personal injury in the brochure of MS Mikhail Lermontov Company.

The court in this case judged the company as a guilty party due to its misleading brochure and orders to the company to compensate her with a total award amount of $51,000. The case shows the concern of Australian Law regarding presentation of right information in brochure.

Conclusion

On the basis of the above analysis of the holiday package brochure developed by Thompson it can be stated that all the information provided in the brochure is subjected to be fulfilled on completion of the terms and conditions of the contract. All the information included in the package is dully verified and checked as per the Australian Contract law as well as consumer law. Also the section 7 of Unfair Contract Terms related to exclusions and limitations are well abided by the provisions stated in the brochure. Therefore it can be concluded that the brochure meets all the essential requirements of the Australian Law.

References

Bonell, M.J. 2009. An International Restatement of Contract Law: The Unidroit Principles of International Commercial Contracts. Martinus Nijhoff Publishers.
Carter, V. and Harland, M. 2004. Contract Law in Australia. Butterworths Lexis Nexis.
Cartwright, J. 2014. Contract Law: An Introduction to the English Law of Contract for the Civil Lawyer. A&C Black.
Corones, S.G. 2011. The Australian Consumer Law. Thomson Reuters.
Gillies, P. 2004. Business Law. Federation Press.
Goldring, J., et al, 1998. Consumer Protection Law. Federation Press.
Latimer, P. 2012. Australian Business Law 2012. CCH Australia Limited.
Review of Australian Contract Law. 2012. Online]. Available at:https://www.ag.gov.au/consultations/pages/ReviewofAustraliancontractlaw.aspx[Accessed on: 14 November 2014].
Thomson Group. n.d. [Online]. Available at: https://www.thomson.co.uk/editorial/features/brochures.html[Accessed on: 14 November 2014].
Thomson Group. n.d. [Online]. Available at: https://thomson.inbro.net/seeinsidebrochure/Thomson_Spain-and-Portugal-November-2014-…-October-2015:-July-Edition/INTRODUCING-THOMSON/Front-Cover/page_1[Accessed on: 14 November 2014].
The Australian Consumer Law. 2010. [Online] Available at: https://www.consumerlaw.gov.au/content/the_acl/downloads/acl_guide_to_provisions_november_2010.pdf. [Accessed on: 21 November 2014].
Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010. [Online] Available at: https://www.comlaw.gov.au/Details/C2012C00095. [Accessed on: 21 November 2014].
Terms and Conditions. N.d. [Online] Available at: https://www.thomsonworldwide.com/pdf/terms.pdf. [Accessed on: 21 November 2014].

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