Fuel surcharges and other price revisions after conclusion of the package tour contract

1. Fuel surcharges and other price revisions after conclusion of the package tour contract Michael Wukoschitz, Austria

2. Why is there a need for price alterations after conclusion of contract? • relatively long time span between conclusion of contract and performance of services • services to be performed in countries with other currencies • services subject to fees and taxes which can change at short notice • transportation costs depend on fuel prices subject to considerable fluctuations

3. European Legislation Art. 4 Package Tour Directive 90/314/EEC 4. (a) The prices laid down in the contract shall not be subject to revision unless the contract expressly provides for the possibility of upward or downward revision and states precisely how the revised price is to be calculated, and solely to allow for variations in: transportation costs, including the cost of fuel, dues, taxes or fees chargeable for certain services, such as landing taxes or embarkation or disembarkation fees at ports and airports, the exchange rates applied to the particular package. (b) During the twenty days prior to the departure date stipulated, the price stated in the contract shall not be increased.

4. Austrian Legislation Consumer Protection Act (KSchG) Sec. 31c (Increase in Consideration) Par.1. Forward from the twentieth day prior to the departure date stipulated, a power of the tour organizer to revise the price as laid down in the contract shall not be object of an agreement. Apart from general limitations of admissibility, for the rest such agreement is only permitted if it provides for downward revision under the same conditions as upward revision, states precisely how the revised price is to be calculated, and shall solely allow for variations in transportation costs, including the cost of fuel, taxes or fees chargeable for certain services, such as landing taxes or embarkation or disembarkation fees at ports and airports or the exchange rates applied to the particular package

5. sec 6 (Inadmissible Elements of Contract) par.1. In terms of sec. 879 Austrian Civil Code (ABGB) the consumer shall not be bound to contractual provisions providing for 5. a power of the entrepreneur to ask for a higher consideration than laid down in the contract unless the contract provides for a downward revision of the consideration under the same conditions and the relavant circumstances which shall not be subject to discretion of the entrepreneur are precisely stated and justified. Par. 2. Unless the entrepreneur can prove them having been negotiated individually, same applies to provisions providing for 4. a power of the entrepreneur to ask for a higher consideration than laid down in the contract in regard to services to be rendered within two month from conclusion of contract.

6. German Legislation German Civil Code (BGB) Sec 651a (Typical Contractual Obligations of the Package tour Contract) Par. 4. The tour organizer may only increase the package price if the contract states precisely how the revised price is to be calculated and the revision allows for variations in transportation costs, taxes or fees chargeable for certain services, such as landing taxes or embarkation or disembarkation fees at ports and airports or the exchange rates applied to the particular package. An increase in price asked for from the twentieth day piror to stipulated departure date shall be inadmissible. Sec. 309 Nr. 1 shall remain uneffected.

7. Sec 309 (Inadmissible Provisons without Possibility of Assessment) Par. 1. Even where it is admissible to diverge from legal regulations, General Conditions of Contract shall not provide for • an increase in consideration for products or services to be delivered or performed within four month from conclusion of contract; this does not apply to products or services to be delivered or performed under continuing obligations.

8. Decisions German Supreme Court (BGH) • X ZR 243/01 of 19.11.2001A provision whereas the tour organizer reserves his right „to increase the price as advertised and confirmed at booking in case of increase of transportation costs, taxes or fees chargeable for certain services, such as landing taxes or embarkation or disembarkation fees at ports and airports or the exchange rates applied to the particular package to the same extend as this increase affects the price per person or seat“ is inadmissible and intransparent as it leaves unclear which price would be the basis for the increase. At the time of conclusion of contract the consumer must be able to identify the scope of potential price increases from the related provision itself. The provisoin must enable him to a mathematical verification of the price increase.

9. Austrian Supreme Court (OGH) • 7 Ob 117/05i of 11.07.2005:A provision entitling the tour organizer to a revision of the package price must contain a conceptional calculation mode to enable the consumer to precisely evaluate how a change in the mentioned circumstances will effect his package price. A mere repetition of the law is not admissible for such purpose. A revision of the package price shall only apply to circumstances not forseeable to the tour organizer at the time when the contract was concluded. • confirmed by 4 Ob 154/05h of 04.10.2005

10. United States The Florida attorney general's office has reached an agreement with Oceana Cruises and Classic Cruise Holdings in which the cruise lines will refund a total of more than $3 million to cruisers who were charged fuel surcharges. The agreements were reached after the Attorney General’s Economic Crimes Division received several hundred complaints from around the country because cruise lines were retroactively charging a fuel supplement after cruises had been booked and deposited. The agreements were signed on Feb., 4. Similar settlements were reached last year with Royal Caribbean, Celebrity Cruises and Carnival Corp. and its subsidiary cruise lines.

11. Thanks for listening and taking part in the debate.