Textbook Resources:

Longchamps, D., & Wright, B. H. (2007). Canadian Hospitality Law (3rd ed.). Toronto: ITP Nelson

chapter -15: The Travel Industry

Write a formal report on the topic mentioned in the picture. Write 300-400 words summary with introduction, body, conclusions and recommendations. It must be plagiarism-free.

The Duties of a Principal to the Agent Generally Like the agent, the principal is expected to honour the agency agreement, to be compe- tent, to respect the privity of the relationship, to be honest, and to act in good faith. Commissions As with any commercial enterprise, the raison d'tre of a travel agency is to generate a profit for the owner. The income of a travel agency is derived from the commissions earned on the sales of travel services. The commission rates are set forth in the sales agency agreements. Where no rate is set forth, a reasonable rate is implied. Some hotels mistakenly believe that they do not have to pay commissions on reservations they receive from unauthorized travel agencies. In fact, once the hotel accepts a reservation, the agency has a legal right to the commission even if there is no formal agreement with the hotel. The right to the commission arises quantum meruit the moment the hotel takes advantage of the reservation. According to trade practice, the commission on a hotel reservation is 10 percent of the room rate. Perhaps unfairly, few hotels pay commission for any nights the guest stays past the original reservation. Costs Unless the agency agreement provides otherwise, the agent is entitled to be reimbursed for reasonable costs incurred on behalf of the principal. Reimbursement may be made either by direct repayment or by deduction from amounts owing by the agent to the principal. Proper documentation is essential to avoid disagreements. If the agency agree- ment is silent on the issue of costs, a term may be implied into the agency contract requiring the principal to pay the reasonable costs necessarily incurred to give effect to the agreement. Unauthorized costs are not the responsibility of the principal but must be borne by the agent