Storyline One:
Cheap and Quick Tours is a tour operator that provides package holidays for customers wanting to go to the Balearics.
For the summer 1999 season Cheap and Quick has made a contract with the local Hotel Nirvana for 50% of all its beds.
But in July 1999 the hotel starts work on extensive building repairs which consequently renders the hotel accommodation totally unsatisfactory and completely uninhabitable for any customer.
At very considerable cost Cheap and Quick Tours then has to arrange to put all of its customers who have bookings for the summer season into alternative accommodation elsewhere in the area.
When making these arrangements Cheap and Quick has not made the payment due to the hotel for May/June occupation.
Cheap and Quick Tours tells the hotel that it is not going to make that payment but will set it off against the extra expense which it has been incurred.
It also tells the hotel that it will sue in the English courts for the balance of the expense.
Cheap and Quick Tours does have a contract in writing with the Hotel Nirvana.
But that contract does not deal with law or jurisdiction, nor does it contain any specific provision entitling the company to set off these payments.
The contract does have an indemnity provision but is also has a clause that states that force majeure events will absolve either party from any liability.
The hotel claims that the building works were necessary because of an unexpected tornado in June which caused considerable damage.
Question one: Will Cheap and Quick be able to sue in the English courts?
Question two: Can Cheap and Quick set off sums as it intends to do?
Question three: Can the hotel rely on the force majeure provision?
Answers:
Question one: Possibly not. The hotel may be able to persuade the English courts that it is more convenient for a claim to be heard in its courts and that because property is involved Spanish law should apply.
Question two: Under English law – yes.
Question three: Under English law – probably.
Storyline Two:
Wheely Good Tours is an incoming tour operator.
A few months ago it arranged with a local coach company for several coaches to be provided to take Wheely Good’s customers on an extensive tour of England, taking in all the sights of the many tourist haunts situated up and down the country.
The tour would start in London after the customers were collected from the airport. The coaches would then be taking Wheely Good’s customers into the West Country and then head north, taking in Stratford and many other such places on the way
The whole itinerary had been planned out with attention paid to every detail.
A large group of 40 German tourists is due to arrive in the country during the second week of September. On September 1 the coach company contacts Wheely Good Tours to explain that all its drivers have recently gone down with an unexplained nasty illness.
The drivers are all in hospital and will be staying there for at least one month.
Therefore, the coach company says it will not be able to provide any of the requisite coaches for the group of touring Germans.
The coach company then states that it is Wheely Good’s problem to find alternative transport arrangements and it is not going to help it out of its current predicament.
Wheely Good Tours does not have a full written contract with the coach company.
There is a facsimile exchange dealing with the provision of a coach and the rates but nothing else.
Question 1: Can Wheely Good Tours compel the coach company to provide a coach and driver?
Question 2: Can Wheely Good Tours claim from the coach company all costs which it incurs in obtaining a substitute coach and driver?
Question 3: Does Wheely Good Tours have to take any account of the cost of a substitute coach and driver?
Answers
Question one: No, the court is unlikely to order immediate specific performance. The court will take the view that Wheely Good’s remedy is to claim damages.
Question two: Yes, although it is most unhelpful that there is no formal detailed contract and this may give the coach company force majeure related arguments which it would not otherwise have had.
Question three: Yes,Wheely Good Tours cannot simply take the most expensive option, but if there is only one option then that is the coach company’s problem.