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Case studies - Refund on a Holiday that went Wrong

If you book a holiday, who is responsible if things go wrong – the travel agent or the company offering the holiday?

When Edgar Glucksman booked a 14-night cruise with a cruise company via a travel agent, the agent offered a deal that included free parking and $100 on-board credit.

But when Edgar visited the Cruise Relations desk on the last day of the holiday and asked for a copy of his account, he discovered that the promised credit hadn’t been applied.

The ship’s staff refused to credit the money, even though he was able to show them a copy of his booking invoice which detailed the $100 credit. The ship’s staff called the travel agent, which admitted that it had forgotten to advise the cruise company of the credit and said it would reimburse Edgar when he got home.

What Edgar did next

A week after the cruise ended, Edgar called the travel agent to find out why he hadn’t received a cheque for the $100 in question. He was told by the manager that the travel agent could not pay him the money as it no longer worked with that particular cruise company.

Edgar then contacted Which? Legal lawyers for advice.

Which? Legal advice

We advised Edgar that his contract was with the cruise company and that it was legally required to honour the terms of the deal he booked with its agent. As it had refused to do so, he had a breach of contract claim against them for the value of the $100 credit he had been promised.

We advised Edgar to send a complaint letter to them enclosing a copy of his booking invoice as proof of the deal he had booked via its agent.

Outcome

Edgar received a phone call from the customer services department at the cruise company thanking him for his letter. It advised Edgar that it would send a cheque for the equivalent of $100, which he then promptly received.

Legal points

When you arrange a holiday contract via a travel agent, the travel agent will usually be acting on behalf of another company, in this case, the cruise company.

In legal terms, the travel agent will be the ‘agent’ and the company it is acting on behalf of is known as the ‘principal’.

If you’re buying a package holiday (this includes most cruise holidays), the principal is the party that your contract will be with and this is likely to be a tour operator or cruise company – even if you paid your money to the agent. In Edgar's case, this meant the cruise company was responsible for upholding the contract, not the travel agent.

On the rare occasions when the agent fails to advise you who the principal is, the agent itself could be legally liable for any breaches of the contract by the principal. This is often referred to as the ‘undisclosed principal’ rule.