Seminar 1: Semester 2: Problem Solving: Consumer Travel Contracts
Jackson v Horizon Holidays limited:
In Jarvis v. Swans Tours Ltd. [1973] Q.B. 233 , it was held by this court that damages for the
loss of a holiday may include not only the difference in value between what was promised
and what was obtained, but also damages for mental distress, inconvenience, upset,
disappointment and frustration caused by the loss of the holiday. The judge directed himself
in accordance with the judgments in that case. He eventually awarded a sum of £1,100.
Horizon Holidays Ltd.
We have had an interesting discussion as to the legal position when one person makes a
contract for the benefit of a party. In this case it was a husband making a contract for the
benefit of himself, his wife and children. Other cases readily come to mind. A host makes a
contract with a restaurant for a dinner for himself and his friends. The vicar makes a
contract for a coach trip for the choir. In all these cases there is only one person who makes
the contract. It is the husband, the host or the vicar, as the case may be. Sometimes he pays
the whole price himself. Occasionally he may get a contribution from the others. But in any
case it is he who makes the contract. It would be a fiction to say that the contract was made
by all the family, or all the guests, or all the choir, and that he was only an agent for them.
Take this very case. It would be absurd to say that the twins of three years old were parties
to the contract or that the father was making the contract on their behalf as if they were
principals. It would equally be a mistake td say that in any of these instances there was a
trust. The transaction *1473 bears no resemblance to a trust. There was no trust fund and
no trust property. No, the real truth is that in each instance, the father, the host or the vicar,
was making a contract himself for the benefit of the whole party. In short, a contract by one
for the benefit of third persons.
What is the position when such a contract is broken? At present the law says that the only
one who can sue is the one who made the contract. None of the rest of the party can sue,
even though the contract was made for their benefit. But when that one does sue, what
damages can he recover? Is he limited to his own loss? Or can he recover for the others?
Suppose the holiday firm puts the family into a hotel which is only half built and the visitors
have to sleep on the floor? Or suppose the restaurant is fully booked and the guests have to
go away, hungry and angry, having spent so much on fares to get there? Or suppose the
coach leaves the choir stranded halfway and they have to hire cars to get home? None of
them individually can sue. Only the father, the host or the vicar can sue. He can, of course,
recover his own damages. But can he not recover for the others? I think he can The case
comes within the principle stated by Lush L.J. in Lloyd's v. Harper (1880) 16 Ch.D. 290 , 321:
, “I consider it to be an established rule of law that where a contract is made with A . for the
benefit of B., A. can sue on the contract for the benefit of B ., and recover all that B . could
have recovered if the contract had been made with B. himself.”
It has been suggested that Lush L.J. was thinking of a contract in which A was trustee for B.
But I do not think so. He was a common lawyer speaking of common law. His words were
quoted with considerable approval by Lord Pearce in Beswick v. Beswick [1968] A.C. 58 , 88.
I have myself often quoted them. I think they should be accepted as correct, at any rate so
long as the law forbids the third persons themselves from suing for damages. It is the only
way in which a just result can be achieved. Take the instance I have put. The guests ought to
recover from the restaurant their wasted fares. The choir ought to recover the cost of hiring
the taxis home. Then is no one to recover from them except the one who made the contract
for their benefit? He should be able to recover the expense to which he has been put, and
pay it over to them. Once recovered, it will be money had and received to their use. (They
might even, if desired, be joined as plaintiffs). If he can recover for the expense, he should
also be able to recover for the discomfort, vexation and upset which the whole party have
suffered by reason of the breach of contract, recompensing them accordingly out of what he
recovers.
Milner v Carnival Plc (t/a Cunard)
Then the judge went on to deal with the claim for the cost of the return journey. This claim
was brought under the Package Travel, Package Holidays and Package Tours Regulations
1992 *Q38 by reg.14 of which terms are implied into the contract that where, after
departure, a significant proportion of the services contracted for is not provided, the
organiser must make suitable alternative arrangements and if those are not accepted by the
consumer for good reasons, the organiser must provide the consumer with equivalent
transport back to the place of departure. The judge was satisfied that given the noise in
their cabin, a significant proportion of the service contracted for was not provided. He held
that suitable alternative accommodation was provided until the arrival in Honolulu and was
accepted by the consumer. The issue was whether the forward cabin 7030 was a suitable
alternative provision.
It is trite law that the measure of damages is such compensation as will place the claimants,
so far as money can do so, in the same position as they would have been in had the contact
been properly performed. The task is to compare and contrast what was promised and what
was received, acknowledging that money cannot truly compensate for this deficit. As Lord
Morris of Borth-y-Gest observed in Parry v Cleaver [1970] A.C. 1 at 22, “But a money award
is all that is possible. It is the best that can be done”. Doing the best one can is hardly the
most enlightening guidance for those who have to perform the task, but I am not sure I can
improve upon it.
