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Title: Assignment on Australian Contract Law: Review of a Holiday Package

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Title: Essay on

Australian Contract Law: Review of Holiday Package

Subject: Business law


Subject Code: LAW201A


Table of Contents

Executive Summary................................................................................................................... 5

Introduction ................................................................................................................................. 6

Analysis of the Brochure in order to identify the Legal Issues ..................................... 7

Key Information related to the Holiday Package as stated in the Brochure ..........................................8

Classification of the statements into representations, warranties, terms and conditions in the brochure using principles of Contract Law ..................................................................................................... 11

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

CONSUMER LAW).......................................................................................................................... 15

Identification of the Validity of the Exclusion and Limitation Clauses in the basis of Australian Contract Law .............................................................................................................................................. 16

Conclusion ................................................................................................................................. 18

References ................................................................................................................................. 19


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).


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. 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).

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. 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).

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.

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).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.

Identification 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:

http://www.ag.gov.au/consultations/pages/ReviewofAustraliancontractlaw.aspx[Ac

cessed on: 14 November 2014].

Thomson Group. n.d. [Online]. Available at:

http://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].

http://www.ag.gov.au/consultations/pages/ReviewofAustraliancontractlaw.aspx

http://www.thomson.co.uk/editorial/features/brochures.html

https://thomson.inbro.net/seeinsidebrochure/Thomson_Spain-and-Portugal-November-2014-...-October-2015:-July-Edition/INTRODUCING-THOMSON/Front-Cover/page_1




The Australian Consumer Law. 2010. [Online] Available at:

http://www.consumerlaw.gov.au/content/the_acl/downloads/acl_guide_to_provisi

ons_november_2010.pdf. [Accessed on: 21 November 2014].

Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010. [Online]

Available at: http://www.comlaw.gov.au/Details/C2012C00095. [Accessed on: 21

November 2014].

Terms and Conditions. N.d. [Online] Available at:

http://www.thomsonworldwide.com/pdf/terms.pdf. [Accessed on: 21 November

2014].

http://www.consumerlaw.gov.au/content/the_acl/downloads/acl_guide_to_provisions_november_2010.pdf

http://www.consumerlaw.gov.au/content/the_acl/downloads/acl_guide_to_provisions_november_2010.pdf

http://www.comlaw.gov.au/Details/C2012C00095

http://www.thomsonworldwide.com/pdf/terms.pdf


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