24 Nov 2008

travel Weekly


Q: My agency just received a bunch of debit memos because of a Northwest Airlines reservation-policy rule change that was posted on its website, www.worldagentdirect.com . We never look at that website, as it appears to be for agents who do not want to use a GDS (although I understand that Northwest is posting rules for GDS bookings there, too). We never received any other notice of the change by email, letter, fax or otherwise. Are these debit memos valid? What about future debit memos, now that we know about the rule change?

A: The debit memos are not valid. You should dispute them, promptly and in writing, on the grounds that you did not receive actual notice of the change and therefore could not have agreed to it.

If you use a website regularly, the law presumes that you agreed to the terms and conditions that were in effect when you started using the website. This is because everyone these days is presumed to know that all e-commerce is subject to website terms and conditions in effect when you begin using the website.

However, when it comes to changes, the rule is different. Even if you used the Northwest site regularly, the law will not assume that you agreed to changes in terms and conditions if you did not receive actual notice of them.

As the U.S. Court of Appeals for the 9th Circuit ruled last year in Douglas v. Talk America, “Parties to a contract have no obligation to check the terms on a periodic basis to learn whether they have been changed by the other side.” The court said that the only way to make a website rule change valid is to give “proper notice of proposed changes.”

The court’s ruling would have particular applicability to the www.worldagentdirect.com website, where Northwest is posting rules that purport to apply to your GDS bookings. You obviously have no obligation to check that site if you never use it.

The court’s holding applies not only to Northwest but also to all suppliers that purport to bind agents to new rules by merely posting rule changes on their websites. Indeed, it would also apply to booking-rule changes that appear in the so-called direct reference system pages, which are the part of the GDS that binds agents as opposed to customers.

So, if a supplier wants you to observe a new rule, it needs to send you actual notice before it can take effect. In your case, you received notice when you opened the debit memos. This means that you must observe the new rule starting now, if you want to continue to book Northwest.

Notice can be by email, which is what most suppliers as well as ARC are doing these days, but so many agencies have no record of receiving emails that suppliers risk disputes whenever they give email notices.

If your own agency’s website has disclaimers or other terms and conditions that apply to clients, the court’s ruling means that you, too, need to give advance notice of any changes. For email notices, you can use a registered email service such as the one at rpost.com, which records whether and when each email was received and opened for about 60 cents per recipient.

Mark Pestronk is a Washington-based lawyer specializing in travel law. To submit a question for Legal Briefs, email Pestronk at mark@pestronk.com.

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