Frustration of a Holiday Contract is a difficult concept and this can only be fully explained by a suitably qualified lawyer. However, we shall seek to explain this as simply as we can.  A Holiday is at risk if it is affected by the a pre-existing illness at a hotel or onboard a cruise ship which is proven to be continuing or by political or natural weather events!

If something happens without the fault of either party, to make the performance of the contract impossible, illegal or radically different, then both parties would be excused from the contract.

If the contract is deemed to be frustrated then the Law Reform (Frustrated Contracts) Act 1943 means that any money paid is recoverable and any other money due ceases to be payable (there are exceptions to this rule – expenses etc).

If one party gives an absolute undertaking to perform the contract, then the principle of frustration will not it seems generally apply (so if they agree that you will see/do everything and provide an indemnity for failed travel insurance cover or make arrangements to cover you, then it seems likely that they would strengthen their argument – we have not seen anything to date from any holidaymaker where this undertaking has been given).

It is clear from calls we receive, that tour operators, where difficulties arise (political, health etc), often do not claim that a ‘force majeure’ has arisen (compare that with many travel insurance companies who apparently take an opposite view during the recent North African Travel Crises - Compare also the decision by various foreign governments to remove their citizens in that situation). This is an important point!

Despite health or political risks, you can for example see that there are holidaymakers, who come what may, will travel to such destinations, others are more cautious.

Another question is this; is a contract a one-way street, must the Consumer accept everything that a tour operator states to the exclusion of their own research where risks are evident?

Contracts can be frustrated by events, but these ‘events’ tend to be dealt with by ‘force majeure’ clauses within the contract – if then the tour operator does not rely on ‘force majeure’ but there are other factors that could affect the operation of the contract, such as outbreaks of illness, food shortages, fuel shortages, curfews, security concerns, lack of travel insurance (contrary to the holiday companies own terms and conditions) etc, is not the Consumer entitled to claim that the contract is frustrated on submission of his evidence?

As we understand it (taken from the Textbook – Contract Law, Text, Cases & Materials – Ewan McKendrick – Pages 877 to 883) in the case of Taylor v Caldwell, the Judges thought that in order to claim that the contract is frustrated they would have to look at the contract itself and how it was drafted, then they would ask if what ever was contracted for would be made different by the events. If then the contract was seen to be radically different, then ‘Frustration of the Contract’ could come into play.

In another case, Ocean Tramp Tankers Corporation, we can see that the Judge held that in order to claim that the contract is frustrated, the frustrating event had to be more than ‘onerous’ or more ‘expensive’ (local conditions on the ground/lack of travel insurance?) – it had to be positively unjust to hold the parties bound.

In the Holiday Law Textbook (David Grant & Stephen Mason), there is a discussion on P.238/239 about the consequences of what they refer to as ‘Anticipatory Frustration’. They cite an example of the Gulf War of 1991 and whether holidaymakers due to travel to India would be directly affected by the outbreak of war. The problem was that it would be likely that aircraft would have to be re-routed, thus imposing a greater cost to the tour operator, greater travelling time, in other words affecting the operation of the holiday. In determining this point, they asked questions as to when the frustration would arise – when Kuwait was invaded; when the UN took acton; upon the build up of allied forces; if hostilities appeared imminent, or when the war started? They state, “The law seems to be that even if hostilities had never broken out if it appeared to a reasonable person that holidays were about to be affected then a decision to treat the contract as frustrated would be justified”.  Again, we emphasise your own research and/or the availability of Travel Insurance and how this plays with the terms and conditions of the tour operator is vitally important if you are to claim that a contract has been frustrated.

As you will seen, we have always emphasised the importance of Travel Insurance to Risk Destinations. If your insurer will not cover you, then there is the potential for you not only to be in breach of contract (ie travelling without insurance as per the tour operators terms and conditions), but that the consequences of you travelling as such could have dire financial and personal consequences! In addition, your research is also the key – what did you book, did you plan on going on tours, relaxing by the pool etc; is the product now substantially different because of these events (health or political), have you lost the promise of the product and the ability and freedom to widely enjoy the product?

You need to spend time considering this issue, your own evidence and use it along with other rights to argue your position.

Whilst we hope that you will be able to use this information (it would be legitimate to do so), it can only ever be considered to be a brief guide and only full legal assistance can guide you further on this issue if the tour operator rebuts your argument!

Tags: Cruise Complaints, holiday illness, Holiday Reviews, Hotel Complaints, hotel sickness, Norovirus, Norwalk Virus, Risk Destinations, travel insurance

This entry was posted on Saturday, March 19th, 2011 at 12:42 pm and is filed under HolidayTravelWatch Newsdesk, News Desk, Resolve. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.