Duty of Travel Agents

Length: 10 Pages 2490 Words

“No word is more commonly and consistently abused in the English language than agency” . Although agency is an every day word whose meaning covers activities ranging from distribution outlets to service centres, it proves its real importance in the business and law context. In this context agency is defined as a fiduciary relationship between two parties which “results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent to by the so to act” . Agency law cannot function with out three parties being involved. These three parties include the principal, an agent and a third party. The function of an agent is to act on behalf of the principal when making contacts, receiving statements and making representations and to pay and receive money for the principal. Travel Agents are obviously acting as an agent when selling or booking accommodation, travel etc for clients. The typical relationship between a customer and the Travel Agent consists of the customer being the principal and the supplier of the services, weather it be accommodation or a means of travel, as the third party. However Travel Agents can act on behalf of the provider, ma Continue...


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A failure to follow the duties set out in the agreement and those established by common law may result in the agency being terminated or the agent being sued for breach of contract. Statutory Liabilities The Travel Agents Act 1986 (Vic) provides several means of consumer protection against Agents and also establishes the Agent's duties. This legislation establishes licence requirements for Travel Agents and provides protection for consumers and provisions for disciplinary action. The agent however will not be liable if they are sure of the correctness of their information. It may also be affected by law of negligence and fitness for purpose when the agent is supplying goods and services as implied by the Trade Practices Act 1974 (Cth) . A threat of civil action may also act as a slack deterrent to Agents. These requirements are set out in Division II of the act along with other requirements and conditions relating to Travel Agent licences. Liabilities of Agents As the agent only acts on behalf of its principal when securing a contract with the third party, the agent avoids liability in the course of that contract. Although because of the high volume of claims being made to the TCF, they cannot entirely compensate applicants, it is still a preferable option to seeking legal action in a court of law. Licensing Requirements Under the Travel Agents Act there are several requirements set out, that potential agents must fulfil before obtaining a licence to operate as a Travel Agent. These documents must include audited financial statements, certificate of personal assets, balance sheets, projected costs and figures, income tax returns and auditor's reports to confirm balance sheets and financial statements.

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