CHAPTER 13
Travel Agents and Airlines—
Rights and Liabilities
CONTENTS
A. Chapter Competencies
B. Introduction
C. The Makeup of the Travel Industry
D. Remedies for Small Damages
E. The Rights of the Traveler
F. Special Rights of Airlines
G. Rights of Airline Captains
H. Overbooking
I. Additional Legal Issues Involving
Airlines
J. Liabilities of Travel Agents and
Charter Tour Companies
K. Rental Cars
L. Answers to Case Example
Questions
M. Answers to End-of-Chapter
Questions
Chapter Summary
Airline passengers have certain rights when they travel, including the right to compensation, albeit limited, when
an airline loses luggage; the right to rerouting assistance from an airline when flights are cancelled; and the right
of handicapped travelers to access planes for transportation.
Travel agents must exercise reasonable care in the making of a client’s travel arrangements and must not
intentionally mislead. A travel agent may be liable for giving false or incomplete information and for failing to
investigate third-party suppliers for financial viability and for suitability of facilities. A travel agent will not gen-
erally be liable for the negligence of third-party suppliers such as hotels, tour guides, and restaurants.
A tour operator is generally not liable for the negligence of a third-party provider over whom the operator
has no supervisory control. A tour operator may however, be liable when third-party suppliers fail to provide
promised accommodations.
Car rental companies provide an important service to travelers. These companies are liable if they negli-
gently entrust a car to a driver they know or should know is incompetent, or if they rent a car they know or
should know is not roadworthy. A car rental company will not be liable for an accident caused by an unautho-
rized driver of the rented vehicle.
A. Chapter Competencies
After studying Chapter 13, the student should be able to
1. identify the categories of travelers historically catered to by the American travel industry.
2. describe the job of a travel agent.
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Travel Agents and Airlines—Rights and Liabilities ■137
3. list the four groups that compose the travel industry.
4. define “agency.”
5. define “principal.”
6. define “agent.”
7. explain the principal/agent relationship, giving an example.
8. explain the agency law.
9. explain the term “independent contractor.”
10. distinguish between an agent and an independent contractor.
11. define “tariff.”
12. explain the concept of tariffs.
13. explain the function of small claims court.
14. identify the two sources from which travelers can seek to remedy small damages.
15. define “class action suits.”
16. differentiate between small claims courts and other courts.
17. state the airline’s responsibility when it takes custody of a passenger’s luggage.
18. identify the compensations a passenger is entitled to for lost baggage.
19. identify the treaty that binds the United States and other countries on matters involving international
flights.
20. discuss the liability for checked luggage on international flights under the Warsaw Convention.
21. identify the grounds for international airlines to benefit from the Convention’s limited
liability.
22. identify the prerequisites in tariffs for damaged baggage.
23. discuss the limits of liability for lost baggage on domestic flights.
24. discuss the responsibility of airlines for baggage handling at security points.
25. identify at least five enhanced safety precautions airlines have recently adopted.
26. discuss the airline’s liability for mishandling pets and animals.
27. identify the maximum amount recoverable under the Warsaw Convention for personal injury on
board a plane.
28. identify the advantages and disadvantages of E-tickets (electronic tickets).
29. state the Air Carrier Access Act (ACAA) of 1986.
30. discuss the rationale for the ACAA.
31. identify requirements included in the provisions of the ACAA for handicapped or disabled
travelers.
32. identify the types of risks covered by travel insurance.
33. identify the reasons for which the airlines have a right to cancel scheduled flights.
34. identify the obligations of airlines to passengers when flights are cancelled due to bad weather.
35. identify the safety risks passengers might face on board a flight.
36. identify the rights of airline captains.
37. state the rationale behind the rights of airline captains.
38. discuss the responsibility of the airlines to limit liability for overbooking.
39. explain the priority rules for seating.
40. distinguish the application for punitive damages between domestic and international flights.
41. identify the type of negligent acts that can result in liability to an airline.
42. explain why a travel agent should be familiar with the places he/she recommends.
43. identify the duties of travel agents when they recommend third-party suppliers.
44. explain what a disclaimer is.
45. describe how courts treat disclaimers.
46. explain the errors and omissions in insurance coverage.
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138 ■Chapter 13
47. explain the term “negligent entrustment.”
48. explain the rights, duties, and liabilities of car rental businesses.
B. Introduction
❊At one time the American travel industry catered primarily to three categories of travelers: the
wealthy, business people, and government officials.
❊Sometimes promised amenities do not materialize.
❊Travelers are very aware that they may be entitled to compensation when their travel plans go awry.
Many disappointed travelers try to find that recompense in court via litigation against the travel
agent or against one of the many third-party suppliers (for example, hotels and tour companies)
that make up the travel industry.
C. The Makeup of the Travel Industry
❊The travel industry generally is composed of four groups.
❊Agency law.
■The issue arises whether the travel agent is a legal representative of the supplier of travel services
(such as a hotel, airline, or bus company) or, in the alternative, a legal representative of the
traveler.
■While confusing, know that a travel agent sometimes is the legal representative (agent) of the
traveler and sometimes is the legal representative (agent) of a travel service provider such as a
hotel or airline.
■The outcome of a case against a travel agent or service provider is often determined by whether
the travel agent acted as the agent (legal representative) of the traveler or of the service provider.
■Such relationships involve two parties: a principal and an agent.
■A classic example of a principal/agent relationship is an employer (principal) and employee
(agent). By using agents, a principal can conduct multiple business transactions simultaneously
in different locations and thus greatly expand the principal’s business.
■When an agent acts on behalf of a principal and within the scope of the authority given by the
principal, the principal is legally bound by (liable for) the agent’s acts, and the agent is not. Thus,
where a travel agent acts as an agent for an airline and arranges plane reservations for a traveler,
the airline and not the agent is required to provide the air transportation.
■When an agent acts outside the bounds of delegated authority, the principal is not bound and
the agent may be liable for fraud (deception) for misrepresenting his authority. Thus, where a
travel agent has not been authorized by an airline to sell its tickets, but the travel agent sells tick-
ets on the airline’s flights notwithstanding, the airline is not required to honor the tickets. The
travel agent will be liable to the traveler for losses incurred.
■Where a travel agent is acting as an agent of a tour operator when selling a trip, the travel agent
must inform the client of the tour operator’s identity.
■An agency relationship must be distinguished from that of an independent contractor.
■Independent contractors may or may not be agents, depending on the facts.
■Independent contractors furnish their own supplies and equipment, pay their own expenses, set
their own hours of work, and are paid fees or commissions, not salary.
❊Tariffs.
■The federal agency that regulates tariffs is the Department of Transportation.
■Some of these tariffs contain very one-sided language favoring the airline. Copies of tariffs are
available upon request at airports, although few passengers are aware of this and few ask to
see them.
D. Remedies for Small Damages
❊The amount of damages suffered by a traveler whose plans have gone awry is not always large.
❊The cost of a lawsuit may discourage such travelers from suing the party responsible for the
disruption, whether that party was the travel agent, airline, or travel service supplier.
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Travel Agents and Airlines—Rights and Liabilities ■139
❊Explain the two avenues that make it easy and economical to sue for small damages.
❊Small claims court.
■Many travel-related cases are brought in small claims court.
■To aid that process, small claims court dispenses with formal rules of evidence and procedure
that govern trials in other courts. The maximum amount of money a plaintiff can seek is rela-
tively small and varies from state to state, but is typically around $3,000.
■Because rules of procedure and evidence are relaxed, and because lawyers are not necessary, many
plaintiffs who might be deterred from suing by the complexities and expense of a lawsuit decide
instead to pursue their case in small claims court. As a result, businesses, including those in the
hospitality industry, have a much greater exposure for their shortcomings than if small claims
courts did not exist.
❊Class action suits.
■Class action suits are a financially attractive option for plaintiffs because the cost of the lawsuit is
spread among many plaintiffs instead of just one.
■“[C]lass action relief may well be necessary to vindicate the rights of members of the class, whose
individual claims are otherwise too small (under $500) to warrant independent litigation against
the impressive legal strength of the defendants.”
E. The Rights of the Traveler
❊When travel plans do not turn out as represented and purchased, the law is quite supportive of the
traveler and provides a remedy in many circumstances.
❊Baggage claims—domestic and international.
■A tariff provides that when travelers hand their baggage to an airline to have it transported to
their destination, they are entering into a contract with the airline. This contract binds the air-
line to deliver the baggage to the destination and to restore it to the traveler upon arrival. If the
airline fails to deliver the luggage at the destination, it has breached its contract.
■Under normal contractual circumstances, the traveler would be entitled to recover from the air-
line the value of the lost baggage and its contents. However, because of the frequency of loss or
delayed delivery by the airlines, they would suffer a significant financial burden if travelers were
able to recover the full value of lost property in every case. Therefore, tariffs have been adopted
to protect the airline from unlimited liability.
■The concept of limiting the airline’s liability for this lost luggage is similar to the limiting liabil-
ity statutes applicable to innkeepers when guests’ property is lost or stolen.
•International flights.
– International flights are governed by the Warsaw Convention.
– Under the Convention, the limitation on liability for checked and carry-on luggage is specified.
– The passenger is informed of the limitation on the airline ticket.
– The airline can rebut this presumption if it can show it took all possible precautions to avoid
the loss. Further, passengers have the option of purchasing insurance to cover loss in excess
of the Convention’s maximum.
•Grounds for loss of the Warsaw Convention’s limited liability.
– The clear lesson for airline management is to comply strictly with the mandates of the
Warsaw Convention, thereby avoiding loss of the benefits of limited liability.
•Willful misconduct.
– Another factor that will bar an airline from the advantages of the Convention’s limited
liability is “willful misconduct.”
– Use case examples in the book to explain the concept.
•Damaged baggage.
– Occasionally, a traveler’s luggage will be damaged during transport.
– To obtain recovery for damaged baggage requires that the traveler strictly follow the pre-
requisites identified in the tariffs.
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– One such requirement is that notice be given to the airline within a specified number of
days after receipt of damaged luggage. Failure to give timely notice is fatal to the lawsuit.
– Failure to comply with time requirements for written notice to the airlines will not result in
dismissal of a case where the airlines misled the passenger about the required time limits.
•Domestic flights.
– The Warsaw Convention does not apply to domestic flights.
•Security checkpoints.
– Before boarding a flight, passengers are required to pass through a security check in the
airport consisting of metal detectors and X-rays of carry-on luggage.
– What is the responsibility of the airlines for baggage lost at security points? While the airlines
are required to conduct security screenings, they also have a duty to safeguard passengers’
hand baggage during those checks.
– The security system of an airline should operate in such a manner that it is accountable to
the public for the return of hand baggage.
•Other applications of the lost baggage tariff.
❊Airplane security.
■The surprise attack of September 11, 2001, on the Pentagon in Washington, D.C. and the World
Trade Center in New York City prompted significant expansion of airport security measures.
■Congress and the airline industry responded with increased security measures to help prevent
further incidents. These enhanced precautions were directed at three areas of concern: (1) keep-
ing terrorists away from airports, (2) at airports, detecting hijackers to prevent their access to
planes, and (3) preventing unauthorized entry into cockpits.
■Discuss the changes adopted or under consideration to enhance airline security.
■The breadth of these new safety measures and proposals evidence the heightened concern for
safety aroused by the terrorist attacks.
❊Traveling with animals.
■Animals are treated the same as suitcases or other luggage when determining the airline’s
liability.
❊Personal injury on board international flights.
■Accidents that occur on board a plane and cause physical injury to a passenger are covered by
the Warsaw Convention.
❊Refunds on tickets.
■Explain that sometimes circumstances entitle a traveler to a refund on airline tickets, but getting
that refund can be difficult.
■Remember, when an alleged agent is not authorized to act for the purported principal, that prin-
cipal is not bound and the alleged agent is liable for fraud.
❊E-tickets.
■A recent phenomenon in air travel eliminates some types of fraud committed by travel agents.
■The popularity of e-tickets has grown rapidly.
■Indeed, many airlines have imposed a surcharge on customers who insist on a paper ticket rather
than an electronic one to increase the incentive to use e-tickets.
■The advantage of electronic tickets to the airlines is significant cost savings. Expenses associated
with paper tickets that are not incurred with e-tickets include printing, auditing the printed tick-
ets for accuracy, mailing, reprocessing collected paper tickets at the gates, and addressing prob-
lems associated with lost tickets.
■Discuss the advantages and problems of e-tickets from the passenger perspective.
❊Rights of handicapped travelers.
■When we examine the transportation industry, we see that the airlines and other carriers were
likewise slow to accommodate the disabled.
■Until a short time ago, few laws impacted the decision of commercial airlines and other forms of
transportation on whether to provide transportation to handicapped people.
140 ■Chapter 13
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■When a carrier decided to deny transportation, the reason usually given was simply that planes,
trains, and buses were not equipped to transport the disabled.
■The Americans with Disabilities Act (ADA) became effective in 1992, and the Air Carrier Access
Act (ACAA) became effective in 1986.
■The ACAA was adopted to prevent what Congress called the “humiliating and degrading” prac-
tices of airlines.
■Discuss the provisions of the ACAA.
■Disclosing the need for assistance.
•Handicapped travelers must make their needs known to the airlines. Travel providers need not
guess what the needs of a disabled person are.
❊Travel insurance.
■To protect against financial losses associated with trip cancellations, injuries, and other mishaps
that can occur while on a trip, travelers can purchase travel insurance.
■Discuss the types of risks covered by travel insurance.
•Travel insurance can be purchased through a travel agent or insurance agent. Given the sig-
nificant costs of many trips, travelers are well-advised to consider purchasing this insurance.
F. Special Rights of Airlines
❊Because of the nature of air travel, with the ever-present dangers associated with adverse weather
conditions, hijacking, terrorism, and passenger safety, certain rules apply to airlines only.
❊Right of airlines to cancel scheduled flights.
■In normal contract situations, cancellation would constitute a breach of the airline’s contractual
duty to transport the passenger to the designated destination and liability would result.
■However, there are conditions under which the airline is not bound to fly. In such cases, cancel-
lation of a flight will not result in liability for breach of contract.
■The fact that weather conditions or some other acceptable reason caused the cancellation is not
the end of the inquiry.
■Liability will result if the airline fails to adequately aid travelers in making other arrangements.
■Sometimes an airline’s efforts to aid a passenger whose flight has been canceled or delayed are
frustrated by the negligence of another airline. Liability in such a case may fall on the second
airline and not the one that canceled the flight.
G. Rights of Airline Captains
❊Passengers in flight are confined in the aircraft for the duration of the trip. If anyone on the plane
seeks to jeopardize the safety of the passengers by hijacking, terrorist acts, assault, or otherwise, the
option of calling the police is not available.
❊To address this peril, the law gives the pilot significant latitude in deciding to remove a ticketed
passenger from the plane prior to takeoff.
H. Overbooking
❊Because many people make airline reservations and then do not appear for the flight, airlines will
frequently deliberately overbook a flight.
❊This practice ensures that the plane will fly as close to capacity as possible.
❊A problem arises, of course, when there are fewer no-shows than expected. The result is insufficient
seats on the plane (or rooms in a hotel) to accommodate everyone with a confirmed reservation.
In such instances, the airline will “bump” some passengers, denying them transportation.
❊Anytime an airline is forced to deny passage to a traveler with a confirmed reservation, the airline
is well-advised to assist the customer in arranging alternate travel plans. By doing so, the airline may
limit its liability.
❊Rights of would-be passengers.
■What are the rights of the person who is bumped?
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142 ■Chapter 13
■A passenger cannot hold the airline liable even though she was rerouted due to overbooking
where the airline had a tariff that authorized the carrier to accept reservations in excess of avail-
able space on board the aircraft, nor is the airline liable for seating a traveler with first-class
reservations in the coach section where it overbooked first class and a tariff provided that the
airline does not guarantee assigned space within the aircraft.
❊Priority rules for seating.
■When overbooking occurs, the law specifies how a determination will be made as to who will be
denied seating.
❊Punitive damages for overbooking.
■To avoid liability for punitive damages when a passenger is bumped, airlines should assist the
traveler in arranging alternate transportation.
❊Overbooking on international flights.
■Overbooking on international flights is governed by the Warsaw Convention.
■Bumping is covered by the Convention, which permits a maximum recovery of $400.
❊Punitive damages on international flights.
■A passenger who is refused seating on an oversubscribed international flight is not entitled to
punitive damages due to the limitations of liability provided in the Warsaw Convention.
■Although protected from punitive damages, the airline is well-advised to assist the customer in
arranging replacement travel plans.
I. Additional Legal Issues Involving Airlines
❊Airlines are occasionally sued on additional grounds, including failure to verify that international
travelers possess the necessary documentation for entry into their country of destination, failure to
advise such travelers of the needed documents, and in-flight acts of negligence.
❊Lack of documentation for international travel.
■When people travel to countries other than their place of residence, certain documents are often
required for entry. These may include a passport and a visa.
■Occasionally, a passenger who lacks the necessary documentation and is thus refused entry into
the country of destination will attempt to blame the airline for not verifying that the traveler pos-
sessed the needed documentation. These cases uniformly result in a verdict for the airlines.
❊Wrong destination.
■Passengers are responsible for ensuring their tickets accurately state their intended destination.
The court held that the ticket evidences the parties’ intent as to the transportation services to be
provided by the airlines.
❊Liability for negligence.
■Airlines, like other hospitality businesses, are liable for negligence that causes injury to a guest.
■Examples of the type of negligent acts that can result in liability to an airline include: (1) failing
to properly latch the door of a serving cart that swung open on takeoff and struck a passenger’s
knee, and (2) improper monitoring by flight attendants of overhead luggage racks, resulting in
a suitcase falling on a passenger’s head.
J. Liabilities of Travel Agents and Charter Tour Companies
❊Travel agents play a key role in the travel industry, although their influence has decreased with the
advent of home computers and the accessibility thereon to flight information and airline reserva-
tions. While in the past travel agents functioned as mere ticket dispensers, today they are informa-
tion specialists on whose expertise much of the traveling public relies.
❊Liability for own actions.
■A travel agent is not an insurer that all aspects of a trip are safe, nor can the agent be expected
to “divine and forewarn of an innumerable litany of tragedies and dangers inherent in foreign
travel. . . . [A] travel agent cannot reasonably be expected to guarantee that a traveler will
have a good time or will return home without having experienced an adverse adventure or
harm.”
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■However, like any other business person, the travel agent will be held liable to clients for wrong-
ful acts, including torts such as negligence and fraud.
■Travel agents must exercise reasonable care in making a client’s travel arrangements and must
not intentionally mislead a client.
■Travel agents must provide accurate information.
❊Duty to investigate third-party suppliers.
■Explain the travel agent’s duty to his or her customers.
■The clear lesson from the cases is that travel agents must investigate the third-party suppliers they
recommend to ensure their continued existence and their ability to provide the contracted serv-
ices. Failure to do so can result in liability.
❊Recommend travel insurance.
■Travel agents are well-advised to suggest travel insurance to their customers.
■Such insurance compensates the would-be traveler for the cost paid for the vacation if the trip is
canceled for certain reasons, including bankruptcy of the travel provider.
■Sometimes a travel agent will investigate recommended suppliers and find them in good order.
Nonetheless, while the traveler is at the supplier’s facility something unexpected may occur, dis-
rupting the traveler’s trip. In these circumstances, the agent will not be liable. By researching the
premises, agents satisfy their duty to their clients.
■Security incidents.
•If the travel agent is aware of security issues associated with a hotel or other service provider
the agent recommends, the agent should disclose that information to the traveler.
•Failure to reveal such information may expose the agent to liability.
•Travel agents would be well-advised to make inquiry of recommended destinations to ensure
their relative safety.
❊Liability for breach of contract by third-party service suppliers.
■When a customer purchases a trip from a travel agent and the trip does not materialize as por-
trayed, the agent may be liable for breach of contract.
■The liability ultimately rests with the party at fault, the wholesaler. However, if the wholesaler goes
bankrupt or has discontinued business and cannot be located, the travel agent will bear the loss.
■Not every traveler makes arrangements through a travel agent or airline office. Some travelers
use charter companies that offer reduced rates for those who do not mind traveling without a
lot of frills. The charter company is liable if it breaches its contract to provide transportation.
❊No liability for third-party suppliers’ negligence.
■Travel agents and tour operators are not guarantors that third-party suppliers will act without
negligence. Therefore, agents and tour operators are not liable to travelers when the latter are
injured at recommended facilities due to the supplier’s carelessness.
■Travel agents.
•Travel agents are not liable for the negligence of a hotel, resort, or other service provider
booked by the agent for a client.
■Tour operators.
•Tour operators, like travel agents, are not liable for negligence of third-party suppliers.
•Tour operators are also not liable for suppliers’ contract breaches. Thus, where a tour opera-
tor organized a tour that included a charter flight and the flight was canceled for unexplained
reasons, the tour operator was not liable.
•Tour operators also are not liable for the negligence of independent contractors that provide
services to those on a tour. Thus, a tour operator responsible for coordinating transportation,
hotel accommodations, and certain special events was not liable when a tour participant took
a “booze cruise” and was served too much alcohol, which caused him to leap overboard to his
death.
•Nor are tour operators generally liable when a tour participant is injured during sightseeing at
an attraction on the tour, assuming the sight is not under the control of the tour operator.
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❊Disclaimers by the travel agent.
■Travel agents frequently insert disclaimers in their written materials.
■The effectiveness of disclaimers in limiting the liability of travel agents is questionable.
■A travel agent, rather than inserting a disclaimer in contracts with clients, should use instead
information that defines the relationship between all the parties involved and properly sets out
what liabilities to attach to each.
■Such explanatory material enhances the client’s understanding of the relationships involved and
may aid the travel agent in avoiding a lawsuit.
■Know that providing information about a liability will not relieve travel agents from their own
negligence or wrongful conduct.
❊Errors and omissions insurance for travel agents.
■A travel agent or travel wholesaler can purchase errors and omissions insurance to cover its loss
when mistakes are made.
■The objective of this insurance is for the agent or wholesaler to minimize the financial effects of
errors made by travel agents and their staffs.
■Clients are entitled to better treatment, and with each lawsuit the travel agent’s reputation and
business will suffer and the cost of the insurance is likely to escalate.
❊Credit card fraud.
■Many sales of airline tickets are made over the Internet or on the phone. Facilitated by e-tickets, such
transactions can be completed without the need for the agent and buyer to ever meet face-to-face.
These long-distance transactions, while good for business volume, provide ample opportunity for
unscrupulous customers to commit credit card fraud. Travel agents must be vigilant to avoid being
victims.
■If the credit card used in a ticket transaction is stolen or its use is otherwise unauthorized and
the true cardholder denies the charges after reviewing the monthly bill, the travel agent may be
financially responsible for the sale.
■The way to protect against liability when the true cardholder refuses payment is to have an
imprint of the actual credit card and the cardholder’s signature. While Internet and phone
transactions are consummated regularly in commercial transactions without an imprint or sig-
nature, travel agents accepting credit cards without in-person contact must be aware of the
risks and act cautiously to avoid being the target of fraud.
K. Rental Cars
❊The car-rental business is an important component of the travel industry, as it provides travelers with
mobility and relieves them from reliance on public transportation. However, car rentals present
potential problems for travelers and the rental companies, including overbooking issues and liabil-
ity for accidents.
❊Overbooking.
■A few states have enacted consumer protection laws that deal with unfilled car-rental reservations.
■Each rental company has a contingency plan for unfilled reservations. Most have adopted a
compensation policy for travelers whose car reservations cannot be filled and who rent a
car from another company at a higher price. The amount the rental companies will pay is the
difference between their contract price and the higher price the customer pays to the other
company.
❊Accidents in rental cars.
■When a rental car is involved in an accident while a customer is driving, questions arise as to
whether the rental company is liable to people injured. Generally, the rental company is not liable.
■An exception is the circumstance where it negligently entrusts the vehicle to a lessee.
■A car-rental company is liable for negligent entrustment only when it has reason to know the
lessee is incompetent to drive the car. If it has such knowledge and the lessee is in an accident,
the car-rental company may be liable for the damages.
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Travel Agents and Airlines—Rights and Liabilities ■145
■Foreign citizenship alone cannot constitute notice of a driver’s incompetence.
■Renting to a person under age 25, without more concerns, does not constitute negligent entrust-
ment, nor does negligent entrustment apply where a car-rental company had intended but failed
to place the renter on a “Do Not Rent” list.
❊Rental of a car known to be defective.
❊Unauthorized drivers.
■A problem that car-rental companies often confront is the use of the rented vehicle by unautho-
rized drivers.
■Authorized operators include the lessee and anyone else the rental company approves in writing.
Everyone else is an unauthorized driver.
■If a traveler rents a car and allows a friend to drive who has not been approved by the rental com-
pany, the friend is an unauthorized driver.
■If the friend is in an accident with the car, the rental company will not be liable for resulting
injuries and the rental company’s insurance will not cover the collision. The traveler who rented
the car will be liable to the rental company for damage to the car.
■Travelers who rent cars can avoid these problems by ensuring the rental cars are driven only by
authorized drivers.
■A valet is not an authorized driver even though he parks a rental car with the permission of the
authorized driver.
❊Age discrimination with car rentals.
■The law in some states upholds the right of a rental company to refuse to rent to people under
age 25.
■The law in other states prevents car-rental companies from refusing to rent a car to someone who
is at least 18 years of age, provided insurance coverage is available.
■Most such states provide that any additional insurance costs imposed because of the age of the
driver can be passed on to the driver.
L. Answers to Case Example Questions
13-8-1. Why do you think the law relieves an airline from liability for breach of contract when
a flight is canceled due to weather conditions?
While it is true in a cancellation situation that the airline is not performing its contractual
duty to provide air transportation at a specified time, the airline’s concern is not just
prompt service. It must also be concerned with the safety of its passengers. If the weather
is such that safe passage is questionable, an airline is authorized to cancel the flight with-
out liability to passengers, even though they will inevitably be inconvenienced and rerouted
as a result.
13-9-1. Why does a pilot need the authority to remove passengers from a flight?
The pilot is charged with the safety of the passengers and crew aboard the aircraft. Often the
available information about a person the pilot is considering removing is limited. The pilot
needs broad discretion to ensure security on the plane.
13-10-1. Why do you think the pilot was entitled to rely on statements from the crew “without
further inquiry”?
The pilot was entitled to rely on statements from the crew without further inquiry because
the crew observed behaviors and actions that created concern for hijacking. The decision was
neither arbitrary nor capricious.
13-11-1. What should the airline have done in this case to minimize the loss to the plaintiff?
The airline should have made arrangements for the plaintiff on another airline to make it to
her tour. If that was not achieved they should have given her some discount coupons or gift
certificates covering hotel rooms, or meals or tour fees, along with the $400.
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