Chapter § 2.04 CONTRACT OF CARRIAGE

• Jurisdiction: United States
• Publication year: 2021

§ 2.04 Contract of Carriage

The hallmark of the domestic regulation of air carriers was the tariff system.

"Since the passage of the Civil Aeronautics Act of 1938, tariffs have been the primary legal source of air travel conditions of carriage. Under the tariff system, carriers file tariffs with the Board. . . . Passenger knowledge of these terms has not been a prerequisite to their validity. . . . Tariffs are not, however, a practical means of providing information to the public. . . . It is important that passengers have reasonable access to information about the nature of the air service they are buying with a ticket and its terms and conditions. . . ." ⁵²⁶

The tariff system permitted air carriers to establish the terms and conditions of carriage, albeit with CAB approval, ex parte, and to enforce those terms and conditions against passengers. As long as the CAB "approved" these tariffs, they could not be attacked via common law doctrines governing notice, adhesion contracts, public policy, unequal bargaining positions and so forth. Regarding the liability of air carriers for the most common of consumer problems such as lost, stolen and misplaced bag- gage⁵²⁷ and flight delays,⁵²⁸ the tariff system was the final and only source of the applicable law. Airline tickets, typically, contained language to the effect that the terms and conditions of the contract of carriage were to be found in tariffs on file with the CAB. These tariffs were "incorporated by reference" into the contract of carriage by reliance upon the federal preemption of state common law regarding the obligations of common carriers.⁵²⁹

The first target of CAB's efforts to implement the Airline Deregulation Act was to scrap the tariff system. In 1978 and 1979, the CAB eliminated some of the more onerous tariffs regarding the (1) resolution of consumer complaints,⁵³⁰ (2) disclaiming of liability for the acts of agents and employees,⁵³¹ and (3) disclaiming of liability for flight delays.⁵³²

In 1982, the CAB proposed to make the contract of carriage subject to state common law principles regarding the enforceability of specific terms and conditions,⁵³³ but also proposed to retain the "incorporation by reference" system coupled with federal preemption on the issue of effective notice.

In adopting rules retaining the "incorporation by reference" system,⁵³⁴ the CAB reasoned that the efficient distribution of airline tickets through travel agents required a uniform ticket stock which could not contain each and every term and condition of each and every airline. Presently, all domestic air carriers are permitted to refer passengers to detailed contracts available upon request at airports.

[1] Liability Limits on Lost, Damaged or Delayed Baggage

Domestic airlines may file tariffs limiting their liability for lost, damaged or delayed baggage.⁵³⁵ Domestic airlines may not retroactively change their contracts of carriage.⁵³⁶ These terms should appear, at least, in summary form in the passenger's airline ticket. Several courts have addressed the enforceability of these baggage liability limiting clauses.⁵³⁷

[2] Claims Restrictions

Domestic airlines may file tariffs establishing claims restrictions such as when and how a claim may be filed and when an action regarding such a claim must be commenced. These terms should appear, at least in summary form, on the passenger's airline ticket. Several courts have addressed the enforceability of these claims restrictions clauses.⁵³⁸ However, it is doubtful that unilaterally imposed contractual time limitations for the filing of claims and commencement of lawsuits which contravene State or Federal statutes of limitations and/or the requirements in the Warsaw Convention are enforceable.

[3] Changing the Terms and Conditions of the Contract

Domestic airlines may file tariffs allowing them to change the terms and conditions of the contract of carriage. These terms should appear, at least, in summary form in the passenger's airline ticket. Domestic airlines may not retroactively change the terms of the contract of carriage.⁵³⁹ Several courts have addressed the enforceability of these clauses.⁵⁴⁰

[4] Rules on Reservations, Check-In Times and Refusals to Carry

Domestic airlines may file tariffs establishing their rules on reservations, check-in times and refusals to carry certain passengers. These terms should appear, at least, in summary form in the passenger's airline ticket. Several courts have addressed the enforceability of these clauses.⁵⁴¹

[5] Liability for Schedule Changes, Cancellations, Flight Delays and Seat Positions

Domestic airlines may file tariffs limiting their liability for schedule changes, flight delays and seat positions. These terms should appear, at least, in summary form in the passenger's airline ticket. Several courts have addressed the enforceability of these clauses,⁵⁴² specifically, clauses disclaiming liability for schedule changes,⁵⁴³ failure to comply with check-in requirments,⁵⁴⁴ cancellation because of meterological conditions,⁵⁴⁵ non-refundable tickets,⁵⁴⁶ limiting damages,⁵⁴⁷ limiting the coverage of EU,⁵⁴⁸ promising "best" available information,⁵⁴⁹ failing to re-route,⁵⁵⁰ and failing to provide food, water and restroom facilities.⁵⁵¹

[6] Personal Injur y Liability Limits

Domestic airline tariffs regarding an air carrier's liability for physical injuries generally but not always⁵⁵² reflect the accepted rule for domestic injuries of no limits except those found in the common law.⁵⁵³ As for injuries sustained during international air transportation, the rules of the Warsaw Convention will usually apply.⁵⁵⁴

[7] Consumer Protection Rules

Although the CAB considered scrapping its consumer protection rules, it in fact retained rules relating to smoking,⁵⁵⁵ oversales or overbooking,⁵⁵⁶ public charters,⁵⁵⁷ special event tours,⁵⁵⁸ domestic baggage liability,⁵⁵⁹ contact of carriage,⁵⁶⁰ marketing air transportation on the Internet,⁵⁶¹ handicapped passengers,⁵⁶² and unruly passengers.⁵⁶³ In addition, the Department of Transportation retained the power to enact emergency safety regulations and to deny market entry to unsafe airlines⁵⁶⁴ and to protect environments over exposed to tourists.⁵⁶⁵

The Department of Transportation has also enacted specific Policies Relating To Enforcement,⁵⁶⁶ which focus attention upon problem areas in the marketing of air transportation services. These policies provide legal authority for enforcement efforts and carefully define obligations and duties.⁵⁶⁷

Notes:

^[526] C.A.B. E.D.R.-404, "New Part 255—Notice To Passengers Of Conditions Of Contract" (June 20, 1980).

^[527] See § 2.06 infra.

^[528] See § 2.05 infra.

^[529] See, e.g., Lavine v. American Airlines, Inc., 2011 WL 6003609 (Md. App. 2011) (flight delay caused passengers to miss connecting flight; airline liability governed by contract of carriage; "After buying the tickets (passengers) received an email, the subject line of which reads: 'E-Ticket Confirmation' The headline is: 'Itinerary & Receipt Confirmation' A line at the bottom states: 'A summary of Terms and Conditions of travel is available by selecting the Conditions of Carriage button below' . . . The referenced Conditions of Carriage clearly state that the ticket and the Conditions of Carriage 'constitute the contract.' . . . In our view, the Airline Regulation Act (ADA) and regulations authorized by it permit (airline) to incorporate by reference the Conditions of Carriage to the 'E-Ticket Confirmation' and-more importantly-they are part of the contract between (passengers) and American").

^[530] C.A.B. Order 78-12-49, "Exemption of Tariff Observance to Permit Resolution of Consumer Complaints (Dec. 7, 1978)."

^[531] C.A.B. Order 79-2-106, "Elimination of Tariff Disclaiming Liability for Acts of Agents, Employees and Representatives (Feb. 17, 1979)."

^[532] C.A.B. Order 79-9-129, "Elimination of Tariff Disclaiming Liability for Flight Delays in All Situations (Rule 380) (Sept. 20, 1979)."

^[533] C.A.B. Notice of Proposed Rule Making, "New Part 253—Notice of Terms Of Contract Of Carriage," Docket No. 40772 (June 15, 1982).

See, e.g.:

Fifth Circuit: Balart v. Delta Airlines, Inc., 2002 U.S. Dist. LEXIS 6798 (E.D. La. 2002) (unattended baggage stolen at baggage claim area; passengers received reasonable notice of provisions in ticket and tariff limiting liability to $1,250).

Ninth Circuit: Mauseth v. American Airlines, Inc., 2001 U.S. App. LEXIS 27178 (9th Cir. 2001) (loss of $43,000 worth of leather jackets shipped as checked baggage; liability limitation in ticket of $1,250 enforced; "Under federal common law, an airline passenger is contractually bound to a boilerplate limitation of liability that was reasonably communicated to the passenger. . . . To determine 'reasonable communicativeness' we employ a case-by- case, two pronged analysis that examines (1) the ticket itself and (2) the circumstances surrounding the particular carrier-passenger relationship at issue. . . . The surrounding circumstances to be considered include the passenger's familiarity with the ticket, the time and incentive under the circumstances to be study the provisions of the ticket and any other notice that the passenger received outside the ticket").

State Courts:

Georgia: The Best Jewelry Manufacturing Co. v. ARC Security, Inc., 249 Ga. App. 695, 548 S.E.2d 134 (2001).

"Federal law also authorizes airlines to incorporate by reference in any ticket or other written instrument any of the terms of the contract of carriage to the extent authorized by the U.S. Department of Transportation. And the D.O.T.'s regulations contemplate that, after Congressional deregulation of the airline industry, ticket contracts ordinarily would be enforceable under the contract laws of the States. Correspondingly, the D.O.T. requires carriers to give passengers written notice of the time period within which they may bring an action against the carrier for its acts. . . . . The ticket is expressly

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