Laws Against Cancellation of a Hotel Booking

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In this report I will explain the legal significance of a hotel booking and the consequence if there is a breach of contract. I will start by explaining the significance of having a contract, what the contract entails in relation to cancellation and the consequence of a breach. I will include the statutory rules relevant to the conflict to the compromised solution.

A contract is an agreement that is legally enforceable. Contracts provide businesses with security. If contractual promises are broken the innocent party are entitled to seek a legal remedy through the court system. In this instance we are the dominant party relying upon standard terms and conditions of this contract. Our contract is in writing signed by both parties, so therefore is evidence of the contractual terms and shows intention to be fulfilled. This contract shows us that the parties involved do intend to contract. Our agreement when made is a legally binding contract set on specific terms and conditions, which all parties are aware of and governed by English law. The contract is accepted when signed by the other party.

In relation to cancellation our terms and conditions state,
4.3 If an event is Cancelled, the Hotel shall have the right to impose a cancellation charge (“Cancellation Charge”) which shall be calculated as a percentage of the Revenue as detailed below. Timing of Cancellation Percentage of Revenue In excess of 6 months prior to the event 30% 6 – 2 months prior to the event 60% 2 months or less prior to the event 90% 4.4 The Hotel will make every effort to re-sell to another client the accommodation, function rooms, services and other facilities booked in connection with the event and a proportional reduction in the Cancellation Charge will be made if the hotel is successful. 4.5 If a Cancellation Charge is due, any deposit will be held until the original event dates have passed and an assessment of the charges can be made by the Hotel and the deposit offset against the Cancellation Charge.

Contract law provides a legal framework to enable commercial activity to expand and become financially successful. It relates back to the Latin principle ‘pacta sunt servanda’ (‘all pacts must be kept’) dating back to when trading first began. Understanding this law has developed, and a breach of contract has become recognised in common law. As a result of this it has become appreciated that remedies can be provided as consequence for all manner of agreements that are reached.

The contract also states,
12.10 This contract shall be governed by English Law and the parties to this contract submit to the jurisdiction of the English Courts.

Consequences for Breach of Contract

If a party to a contract fails to perform their obligations under it or performs them defectively is in breach of a contract. If a breach of contract takes place before the time set for performance of the agreement it is called an anticipatory breach this will occur when one party declares they will not perform their part of the agreement. Once an anticipatory breach has arisen the innocent party does not have to wait for the date set for performance but has the option of immediately suing for breach of contract and receive damages. The Hotel is legally entitled to claim damages for loss of earnings through the County Court system.

Relevant statutory rules

Consumer credit act 1974
The consumer credit act 1974 is designed to give protection to a consumer of in a credit sets up a licensing system administrated by the director general of fair trading to regulate businesses that supply credit. The Act also contains the rules relating to the supply, formation, content and termination of...
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