Last week a couple discovered that £100 had been charged to their credit card by a Blackpool hotel where they had recently stayed. The justification? The couple had posted a bad review on Trip Advisor.
The hotel – in its terms and conditions – purported to reserve the right to charge customers £100 for each bad review. Fans of the doctrine of freedom of contract may well have some sympathy with the hotel’s position. If the couple had not wanted to become subject to this restriction – one might argue – they should not have booked with this particular hotel. Theoretically, a hotel might argue that it can only keep its costs low by imposing such terms: if you want to benefit from the low costs, you should be prepared to abide by the contractual terms.
This of course is not the whole story. Businesses are unlikely to be able to rely on terms based on an imbalance of power between the business and the customer. In situations like this, where the provision was part of some small print which was not negotiated – and the couple claim not even read – by the customers, the Unfair Terms in Consumer Contracts Regulations should help the customers’ case.
Furthermore, one might query whether the hotel can show that the £100 equates to a genuine pre-estimation of their loss, stemming from a bad review. If not, broadly speaking, it would likely be classed as a penalty and as such would not be enforceable.
These are two of potentially several problems with the hotel’s position. The hotel has backed down, one suspects not so much due to the finer points of contract law, but to the pressure brought to bear by Trading Standards and the court of public opinion.
Please contact Harry Perrin if you would like to discuss any of the issues raised in this article.
The information provided in this article is for general information purposes only and does not constitute legal or other professional advice and cannot be relied upon as such. Any law quoted in this article is correct as at 21 November 2014. Appropriate legal advice should be sought for specific circumstances before any action is taken. Copyright © Murrell Associates Limited, November 2014.