The Hotelier And The Guest Under In Contractual Case Law Post Covid 19 – An Introduction:

By Author: premkumar nadarajan.
Total Articles: 26
Comment this article

Using the legislation Contracts Act 1950 (revised 1974), the question arises as to what is a contract. The answer is that it is an agreement enforceable by law. A contract of booking between the hotelier and the guest may be defined as a legally binding agreement between them for the provision of food and drink.
The description “offeror and offeree” are simply a lawyer’s way of describing the parties. The “offeror” is the party making the offer to contract, and the “offeree” is simply the person to whom the offer is addressed.
An offer, generally coined as a proposal in Malaysia is an expression of willingness to contract on certain terms with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed. An offer is made by the offeror to the offeree.
A case albeit in English Law is useful at this juncture to illustrate this point namely the case of Goldsborough Mort Vs. Quinn (1910) The quaint facts are as follows, namely that Quinn (defendant) granted Goldsborough Mort & Co.Ltd. (plaintiff) the following option: “I, Quinn, in consideration ...
... of the sum of 50 cents paid to me hereby grant to Goldsborough Mort & Co.Ltd. The right to purchase the whole of my freehold lands…within one week from the date at a price of 4.40 pound sterling per hectare..”
Before the end of the week and before the plaintiff had accepted, Quinn told the company that he was withdrawing his offer. However the company still went ahead and formally accepted the offer within the option time and sued for specific performance. The question arises as to whether Quinn could withdraw his option before the promised time period had elapsed. The court held that the option, having been given for value (the payment of 50 cents) was enforceable and recoverable. The company’s acceptance was good and a binding contract was made which was enforced through an order on specific performance. Thus, Quinn has to honour the option.
Advertisement are, generally, invitations to treat, not amounting to an offer because no sufficient information in the advertisement to amount to an offer. This is especially the case in media advertisements surrounding hotel bookings which in most cases resulting in a contract of a bilateral nature would invite the general presumption that such advertisements are only offers to receive offers, I.e. invitations to treat, unlike advertisements surrounding reward cases such as found in the watershed case of Carlill v. Carbolic Smoke Ball & Co.
Normally, when perspective customers reply to advertisement put out by hoteliers, they will be forwarded a brochure explaining in further detail the accommodation or services offered by the hotelier. The question arises as to whether this amount to an offer to contract. Normally, this is not the case because it is silent about the availability of accommodation. When the hotelier accepts the booking form (which normally is attached to the brochure) from the customer, this amount to an offer to contract made by the customer to the hotelier.
With regards to telephone booking, the question arises as to whether there can be formed a basis of a contract when a prospective customer telephones a hotel to enquire about the services or accommodation provided. It is submitted this can be the case because a contract may be created by spoken words and in writing. However, oral contracts are often difficult to prove in court. In addition, words must be sufficiently clear and must establish an offer made by one party and acceptance of it by the other party. Therefore, normal booking practice requires written confirmation of booking (which amount to an offer to contract) and the hotelier’s reply will be the acceptance to the offer.
Chance call booking on the other hand is where a prospective customer pays a casual call at the hotel looking for accommodation. The reception manager will normally check the availability chart and inform customers whether or not they can be accommodated. When the customers respond by telling the reception manager that they will take the rooms, this amounts to acceptance and the contract is formed. Certain formalities of registration must then be undertaken. This gives rise to the issue as to whether the hotelier include further terms in the contract by means of notice displayed in the guest rooms.
The case at hand is Olley v. Malborough Court Ltd (1949). The quintessential facts were as follows namely, a married couple arrived at a hotel as guests; they paid for the accommodation. The couple then went to their room, where on a wall was displayed the notice ‘the proprietors will not hold themselves responsible for articles lost or stolen unless handed to the manageress for safe custody”. The wife closed the door, which locked, and took the key to reception. A third party took the key and stole some of the wife’s jewelry from the bedroom. The Plaintiff sued the hotel for damages with regard to the stolen property. The Defendant hotel tried to rely on the notices in the room as a term of the booking contract exempting from liability. The court held that the contract was completed at the reception desk and no subsequent notice could affect the plaintiff’s rights; the notice not being sufficient to incorporate the aforesaid exclusion clause into the booking contract. The court further opined that a chance booking is made at the time when the guest books in at the reception desk. The proprietor to include a term in the contract, must do so then and there either by informing the guest verbally or by displaying a notice at the reception desk. One must note additionally in general terms of contractual matters, with regard to acceptance generally there are no serious contentions regarding the matter; whether done orally or in writing, it must be communicated to the offeror.
The matter surrounding privity of contracts and rights of third parties is somewhat of a combative area regarding hotelier and guest contracts. The doctrine of privity of contract means that a contract cannot confer rights or impose obligations upon any person other than the parties to the contract. The case at hand here is Jackson v. Horizon Holidays [1975] 1 WLR 1468 where the plaintiff booked a holiday for himself, his wife and their two children. The total cost of the holiday, including air fares, was 1,200 pounds. The holiday provided failed to meet the description given in the defendant’s brochure in a number of vital respects. The plaintiff brought an action claiming damages, including a claim for his own personal disappointment and that of his wife and children due to the failure of the holiday to meet the description given by the defendant company. The trial judge allowed, when assessing the damages payable by the defendants (1,100 pounds), for the disappointment of the plaintiff alone, and not for the disappointment of his wife and family. The defendants appealed against the quantum of damages. It was held by the Court of Appeal, ( in dismissing the defendant’s appeal), that the quantum of damages , whilst high when considering the disappointment and distress suffered by the plaintiff alone, was fitting if the distress and disappointment of his wife and family was to be considered. Whilst his wife and family themselves could not sue upon the booking contract, since they were not a party to it, the contract was made in part for their benefit. Since the contract was to benefit the wife and family, the plaintiff could receive damages for the loss of benefit sustained by them due to the defendant’s breach of contract.
In a booking contract, consideration means actual payment of the contract price at the time of the booking by the offeree ( executed consideration – has been performed ) or the price to pay the contract price at a later date as agreed by both parties ( executory consideration – since it has yet to be performed) . The General rule of thumb is that the consideration must be sufficient.
Capacity is also a rudimentary element or requirement for the formation of a valid hotelier-guest contract. If the guests lack the capacity to contract and defaults on payment of the bill for services rendered by the hotel, then the hotel will have difficulty in recovering the money by an action in court. A minor ( under the age of 18 ) is allowed to contact , but it is limited , to contract for necessaries which means goods suitable to the condition in life of the minor or other person concerned and to his actual requirements at the time of the sale and delivery. The case at hand is Nash v. Inman [1908] 2 KB 1, the quintessential facts being Nash the plaintiff a Saville Row tailor , sought to enforce a contract for various items of gentleman’s clothing against a wealthy Cambridge University undergraduate. The clothes totalled 122 pounds in value, and the included a number of “fancy Waistcoats”. The defendant argues that the items of clothing purchased were not necessaries and thus the contract was unenforceable. The court held that since the defendant already possessed sufficient clothing, these further articles were not “necessaries”.
Last but not least, the ending of the aforesaid contract. To understand termination of the contract one must first appreciate the performance of the same; a booking contract is performed by the provision of the stated services and accommodation on the part of the hotel and the payment of the contract price by the client. Discharge by frustration can occur as seen in the locus classicus Taylor v. Caldwell EWHC QB J1, (1863) 3 B & S 826, 122 ER 309, the essential facts as follows; the defendant let to the plaintiff a music hall for the purpose of holding four concerts. Prior to the 1st concert for the music hall was destroyed by fire. The plaintiff sued the defendant for damages for not having the music hall available for his use on the dates booked. The court held that since the music hall had ceased to be usable owing to fire, the contract was impossible by performance, the defendant was not liable to pay damages.
With regards to damages claimable parties who are the victims of breach of contract may sue for damages. If a client cancels a booking contract for accommodation, the hotel will sue for the contract price. The amount they are likely to receive is the amount of money which put them in the position they would have been in had the contract been performed by the other party. Where the hotelier makes a false statement which forms the term of the contract between the hotelier and the client, the client may sue for breach of contract.

lecturer at a private learning institution ( UTAR).