Contract Law Case Summary ABTA PDF

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CASE SUMMARY of: Bowerman v Association of British Travel Agents Ltd [1996] C.L.C 451 FACTS In this case, the two claimants are Emma Bowerman and Mr Wallace, and the defendant is ABTA. ABTA is a tour operator that became insolvent and the claimants are appealing to get reimbursed. The two significant non-parties in this case are Adventure Express, who is an ABTA tour operator and Skibound Ltd, who are another tour operator. This case ended up in court because Emma Bowerman wanted to appeal against the decision of Mitchell J (there was no contractual relationship). In the first instance, the first claimant went to the high court because she believed that the notice displayed by the defendant constituted to a contractual offer and therefore believed that under the terms of the notice she was entitled to a reimbursement. However, the lower court’s decision was affirmed, and the appeal was dismissed. ISSUES • i) Whether there was a contractual agreement between the defendant and ABTA? • Whether the language of the notice intended to create legal relations? • Whether the words of the notice are promissory? • ii) Whether ABTA is liable to be reimburse the £10 insurance to the claimant? • Whether the claimant had the capacity to enter the contract? • Whether the notice amounted to an offer? • iii)Whether Mr Wallace is a contributing factor to this issue? • Whether there was any consideration from Mr Wallace? 1. DECISION The appellate court allowed the appeal. It was a majority decision. The majority judges were Waite LJ and Hobhouse LJ and the dissenting judge was Hirst LJ.

2. REASONING FOR DECISION i) Hirst says there is no intention to create legal relations. Hirst draws attention to the limitations of the scheme. In part 6 it says, “ABTA’s protection scheme... cannot cover the financial failures of these mom-ABTA companies”1. Hirst argues that the defendant accepted this offer, therefore they should know that ABTA will not refund the money to Ski bound Ltd. A second reason why Hirst believes there was no direct contractual relationship between ABTA and the defendants was due to the promissory language in the notice. The case of Carlill v Carbolic Smokeball Co2 is used because Hirst utilises the words “constituted an offer to anybody who accepted it by performing the conditions named in the advertisement”3. The case is used for authority to focus on the idea that an offer can be made to the world. However, Hirst says that he would understand an ordinary member of the public would see this as an offer but believes it doesn’t assist to

whether the agreement is contractual. The language used “in the Carlill case (‘£100 reward will be paid...’) is essentially promissory in character”4, in contrast Hirst uses this case to diminish how the words in this notice are not promissory. He focuses on this through the pronouns “you... your”. Hirst argues there is no contractual agreement between the defendant and claimant because the notice is trying to attract the attention of the customer, therefore it is “descriptive rather than contractual in character”5. On the other hand, Waite believes there to be a contractual agreement between the ABTA and Bowerman because Waite states” ABTA is not a charity or a friendly society”6, therefore, the notice did amount an offer. Firstly, because it is a serious business agreement as ABTA is offering something of value. Furthermore, an ordinary member of the public would read the notice and see it as offer. He states that the cases don’t aid his view much, however he does emphasise there is a struggle with analysing the “variety of tone and language which (the notice) … employs”. He states that the use of second and third person are promissory and believes all the words to be of “binding solemnity”7. On the other hand, Hobhouse says that this case “echoes in almost every respect...”8 of the Carlill case. In relation to this case, Hobhouse is saying that there was a contractual agreement between the claimant and the defendant because this case mirrors the case of Carlil. Hobhouse repeats the phrase “ABTA Promise”9 a plethora of times as he desires to emphasise that the agreement is promissory and binding, therefore this language intends to create legal relations as it is in the title. He elaborates further to say that the notice read by a member of the public contains “an offer of a promise which the customer is entitles to accept by choosing to do business with an ABTA member.”10 ii) Waite holds the opinion that ABTA is liable for a £10 reimbursement. In the first paragraph he speaks about the means that Emma Bowerman obtained her money for the trip. He describes to have worked hard for her money and further claims more students are in the same situation. In her witness statement, Bowerman emphasises she didn’t have the capacity to enter this contract as she is a minor, therefore she ABTA is liable for a reimbursement because Bowerman lacked the capacity of entering a contract because she knew was that her “money was safe”11 . iii) In one of Waite’s paragraphs, he iterates the role of Mr Wallace and about his years of experience. Mr Wallace said that the trip had to be “ABTA backed”12 In Waite’s own words he says “there is no dispute Mr Wallace was acting as agent... and that his knowledge and expectations can be imputed to her.”13 Therefore, ultimately Mr Wallace could be blamed for the issue, however in the next paragraph Waite diminishes the above- mentioned argument as he says it “is of background relevance only”14 as he furthers his matters on a more probing issue. Hobhouse states that there was no consideration from Mr Wallace because it “was required by the local education authority and by the children’s parents to buy only ABTA backed holidays”15; meaning that he gave no consideration as he was obliged to have

an ABTA holiday. Even though Mr Wallace had no consideration, he still accepted the offer.

3. RATIO DECIDENDI A Unilateral offer can be made to any member of the public and not just an individual. The offer can be performed, and the acceptance doesn’t need to be communicated as soon as the offer is performed....