in Tax and Accounting Law
Asked October 17, 2013

legal action against the hotel for violations of terms of stay

  • 1 Answer

I recently went on a vacation with my family and it was under one of those 'Holiday packages' offered by travel agents. All the arrangements for the trip were made by the travel agent, including the hotel stay. However, our stay at the hotel was a horrible experience and I am told that the problems we faced at the hotel qualify as a 'legal injury' for which one can sue the hotel. But I was under the impression that one needs to be a member of a contract in-order to sue under it or enforce it. Am I in a position to take legal action against the hotel for violations of terms of stay?

Answer 1

What we are looking at is the concept of exceptions to the privity rule in contracts, which has been developed by courts over a course of time. The exception does not prevent a person from enforcing a contract made for his benefit but without his being a party to it. One such contract is beneficiaries under trust or charge or other arrangements.

Trust may be actual or constructive. Constructive Trust is created in favour of a third party as an arrangement, and he can claim compensation for breach.

An airline company made an arrangement with a hotel for accommodating its passengers. One of the passengers was injured because of the negligent maintenance of the hotel premises. His action against the hotel was allowed.

The Court said that the exception applies to the privity of contract principle applies in this case. (Klans Mittelbachert v East India Hotels Ltd. AIR 1997 Del 221). The Court cited Bhujendra Nath v. Sushamoyee Basu (AIR 1936 Calcutta 66) and Pandurang v. Vishwanath, (AIR 1939 Nagpur 20), where the Court has held that "A stranger to a contract which is to his benefit is entitled to enforce the agreement to his benefit." In Greene v. Chelsea Borough Council (1954 (2), All ER 318), the husband had taken premises on license from the defendant. The ceiling fell and injured the wife, who brought a suit for damages which was objected to by the defendant on the ground that she could not sue as the defendant owed no duty of care to the plaintiff since she was not a party to their agreement with her husband. The contention was overruled and it was held that the defendants were liable towards the plaintiff for breach of duty. The contract for stay in the Hotel is between the agent and the Hotel you to stay as guest in the Hotel. The beneficiaries are those who would stay and hence the contract is for their benefit. Consequent to the breach of the contract those who stay in the Hotel will be entitled to sue. As the court has rightly held, "Any other view of the law would create an anomaly." Those who are staying in the Hotel would not be entitled to sue because they were not parties to the contract. Thus, the travel agent would not be entitled to sue as he has not suffered any injury.


Sources:Contract and Specific Relief, Avtar Singh (Eastern Book Company, 10th Edn. 2010)Klans Mittelbachert v East India Hotels Ltd. (AIR 1997 Del 221)

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