(I live in Australia, but the I’m sure the basics of contract law wouldn’t be too dissimilar in other western countries).
A few months ago my SO purchased three international flights from Australia to particular Asian country. She called up a travel agent, explained what she wanted, was offered three return tickets at roughly $1,200 each. My SO gave some details (the phone conversation was not recorded) and signed nothing. My SO said she would like to buy the tickets, and will transfer the money electronically as soon as possible.
Soon after, my SO logs in to her internet banking account and transfers $3,600 to the travel agent.
Later that day, one of the three people whom these tickets were bought for asked my SO not to go through with the purchase of that one particular ticket. Knowing that she had already transferred the money earlier in the day, my SO rang her bank and asked them whether the money of that particular transfer had yet cleared in to the recipient’s account. The bank advised my SO that the money had NOT yet cleared.
My SO then rings the travel agent and informs them that she only now wishes to purchase two tickets, not three. The travel agent informs my SO that the tickets have already been purchased on her behalf. The travel agent confirms they have done this prior to receiving the “in transit” money transfer from my SO. The travel agent says that there is a $300 cancellation fee on the cancelled ticket, hence only $900 will be returned.
My SO has spent the last few months trying to get that $300 back, on the basis that she believes the travel agent should not have purchased the tickets without receiving the money.
It’s not in the hands of Consumer Affairs (a small claims Watchdog here in Australia) who themselves appear to be unsure of who is in the “wrong” here.
Any legally minded dopers want to take a shot at it?
Be very dissimilar in other Western Countries, if they are not common law countries and similar in non Western Countries (like India and Pakistan) who are.
To your question, I think at the moment when your SO had agreed to purchase the ticket the contact was sealed.
In big picture terms, the contract is formed when the agreement is made. Legally speaking your SO was engaged in a perfectly formed contract when the travel agent described the specific terms (the offer) and your SO promised to pay and indicated unconditionally that the agent should proceed with the transaction (acceptance).
At no point, based on what you described, did your SO condition the agent’s action on FIRST receiving the money. He made a promise to pay on the terms she described, and the agent was entitled to rely on that in the absence of information to the contrary.
US law, though I am given to understand that of all common law legal systems, US & Australia are the most similar.
The cancellation fee emanantes from the airline, not the agent, I believe.
Now you’re getting into agency law. SO gave his authority to Agent to contract with Airline. Agent contracted within the scope of the authority granted. Thus, SO is bound to the terms Agent contracted with Airline on, whether SO knew about them or not. If SO was smart, SO would make it their business to know what the terms would be with Airline. That SO failed to do so, is not Agent’s fault.
(hopefully this goes without saying, but the above is based on generalities about the US legal system, and is not legal advice, etc).
Under US law, it’s immaterial if the money had not yet been transferred. Once your SO agreed to purchase the ticket, the contract existed.
The travel agent relied on your SO’s statement to her own (ie., the travel agent’s) detriment; that is, buy purchasing a ticket for which she had not yet received payment. That means the travel agent might now have a cause of action if your SO had placed a stop payment on the transfer or something, but not that your SO has one.
Nonsense, at least without a lot more information. Note that the OP asked a legal question, not a moral one.
This is not legal advice, but general info about contracts. There are three elements necessary:
Offer & acceptance
Consideration
Intent to form a binding agreement
Applied to this case, offer and acceptance are the agent naming a price and the purchaser saying yes. Consideration is that both parties get something out of it.
If the agent never mentioned detailed terms, or pointed the purchaser to somewhere where the terms were, or used language indicating that a contract was being formed (all of these are details we don’t know about) then there is a possible argument that there wasn’t an intent to form a contract, and therefore no contract.
For the travel agent to actually act as an agent, you still need an agency agreement (which is a contract) so the idea that they formed a contract on your behalf is a furphy.
I concur with the bulk of the opinions offered here. The contract was sealed. The agent was acting on your instructions and incurred the costs. You are obligated to pay. Contracts don’t require payment to be completed. The world of business runs on “receivables.”
I agree with the other commentators that in terms of contract law your SO had a binding contract with the agent from the time of the phone call. Short of arguing that the cancellation fee wasn’t part of the terms of the initial contract (a slim chance as they could retort that there was no cancellation term at all so they are entitled to full payment for the third ticket) I think you’d have to look outside of contract law for any viable claim. Maybe the Trades Practices Act? Any way to argue that the travel agent has been misleading or deceptive in terms of section 52?
Note that there may be (in fact, probably is) codified law in your country and state which affects your SO’s rights as a consumer, not to mention common law provisions. Most of the answers here are based on the current standard of US common law, which has evolved in any number of ways since the 18th century.
Contract law between merchants is much more standardized across nation-states, because it’s good for business.
lisiate refers to the Trades Practices Act, which I assume is one such codification of contract law regarding transactions between merchants and consumers.
Yeah, since the OP didn’t bring up the question and you know nothing about their relationship, it’s unnecessary intrusion into the OP’s personal business. The OP asked about a commerciao matter, not a question about personal relationships.