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Risk in Tourism – Part 7

In Part 1 (page 36 – Tourism Tattler August 2014), Louis the Lawyer categorised risk into five categories, namely; 1. PEOPLE, 2. MONEY, 3. LAW, 4. SERVICE and 5. ECOLOGY. I will be dealing with the risk profile of each, i.e. broadly speaking the areas of risk that any business is exposed to can been allocated under these five categories.
In Part 2, (page 22 – September 2014), I covered the category of ‘People’ under four sub-categories: Staff (discussed in Part 1); Third party service providers (‘TPSP’); and Business Associates.
Part 3 (page 24 – October 2014), continued with ‘PEOPLE’ as Customers.
Part 4 (page 27 – November 2014), started the discussion on the 2nd category, namely ‘MONEY’ in terms of CASH and CHEQUES.
Part 5 (page 23 – December 2014), looked at CREDIT and CREDIT CARDS.
Part 6 (page 25 – January 2015), looked at LAW and CONTRACTS, with an introduction and Requisite #1: Offer & Acceptance.

In this issue we continue with Requisite #1 in terms of the medium of enquiry as it relates to offers and acceptances in contracts.

REQUISITE #1: OFFER & ACCEPTANCE

TELEPHONE ENQUIRIES

Let’s look at each medium of enquiry alluded to in Part 6 of this series and suggest a ‘best business practice’ for each. Let’s start with a TELEPHONE ENQUIRY: My advice is that you confirm the telephone conversation via e-mail.

Most people nowadays have an e-mail address and if it is a new customer, simply ask them for their e-mail address and type up the content of your discussion whilst talking or immediately afterwards. There will be a very strong presumption that it is correct if the customer does not dispute (any of) it. The further benefit of doing this is that, if your e-mail has the ‘correct’ ‘signing off’ wording, the offer extended by you via e-mail and the ultimate acceptance will incorporate your standard terms and conditions (‘STC’). The case of Lambons v BMW (1997 SCA) was about a visit by BMW to Lambon’s business premises and his allegation that he was appointed 3 days later as a dealer during a telephone conversation (call from) with BMW. The court found that the telephone conversation was unlikely to have constituted such an agreement inter alia because there were too many outstanding issues such as the area. Lambons should have known there could only be a binding agreement once all the outstanding issues had been agreed upon.

E-MAILS & WEBSITES

The second medium alluded to is E-MAIL: by definition the comments in the previous paragraph will apply to such communication. Last year (November 2014 – Spring Forest v Wilberry: SCA) it was confirmed that an agreement concluded via (exchange of) e-mail is binding and that a type –written name comprises a signature. This applies as well to an exchange of Short Message System (‘SMS’) as was suggested a couple of years ago in a judgment in the Labour Court (Jafta v Ezemvelo KZN Wildlife).

Thirdly enquires via your WEBSITE: it is imperative not only that your website contains your STC but also that your IT people set up your website in such a manner that it works on the ‘click and accept’ principle i.e. a customer cannot proceed to peruse your website or at least make a booking until he or she has accepted to have read and be bound by your STC. Ideally you should have some form of audit trail as well.

ONE-ON-ONE ENQUIRIES & ADVERTISING

The fourth type of enquiry alluded to is the OFF-THE-STREET or CASUAL ENQUIRY: very few businesses deal with these effectively. It is imperative that such customer must sign and accept your STC as well. This can be done by means of a business application form which captures all the customer details, serves as a marketing tool and also contains your STC without it being ‘in your face’ (Provided such wording meets the requirements of the CPA).

Remember if the customer leaves your offices with a written or verbal offer which does not incorporate your STC, it is very difficult if not impossible to later ‘import’ the STC into the booking (More about such ‘implied terms’ in later articles). You should also bear in mind that, in my experience, 90% of your problems come from 10% of your bookings and the majority of that 10% usually has NO contract and is therefore in terms of common law!

A very important principle should be borne in mind: if the customer does not accept your offer but reverts with a totally different proposal or qualified offer (assuming there has been no misunderstanding), this will constitute a COUNTER-OFFER and the whole process will start afresh, i.e. you can reject or accept this counter-offer of the customer.

ADVERTISING is an interesting area of law and has been held to constitute an invitation to the public to make an offer and as not constituting an offer as such. However I believe the CPA has changed that and it applies from the very first ‘interaction’ between the supplier and the consumer (the CTP) which in most cases is some form of advertising – accordingly it is imperative that all forms of advertising should comply with the CPA and incorporate reference to your STC.

Disclaimer: This article is intended to provide a brief overview of legal matters pertaining to the travel and tourism industry and is not intended as legal advice. © Adv Louis Nel, ‘Louis The Lawyer’, February 2015.