The Basics of Contract Law for Booking.com and other Organisations

Estimated reading time at 200 wpm: 14 minutes

It often appears that there is a widespread misunderstanding of the fundamentals contract law in the UK. This is particularly noticeable when individuals or organisations attempt to introduce new terms and conditions after an agreement has already been made. Many encounters suggest a common belief that additional rules or conditions can simply be imposed once a deal is struck. How dumbass is that? Very dumbass! How? Example: You agree to have your right big toe removed (for whatever reason) at a private hospital where you agreed to pay £800 for the surgery. You wake up with your left leg chopped off – a bit surprised because you didn’t agree to that. Explanation given: “Well we thought it was necessary to chop of your left leg, so we did it. You should be thankful because chopping off a whole leg is more difficult than just a toe. You now owe us £2000. You have 14 days to pay up. But we will write off the £800 charge for the right big toe. Best wishes with your recovery.” And some are fine with that – which is fine in a free and democratic society where everybody believes they have ‘individual choice’.

A contract is far more than just a casual agreement; it forms the bedrock of most transactions in our daily lives. It is a legally binding promise, creating mutual rights and obligations for the parties involved. Without clear, enforceable contracts, everyday commerce would quickly descend into chaos, leading to endless disputes and uncertainty.

Consider the common act of purchasing a new cooker for your kitchen. When you agree to buy it and pay for it, a contract is formed. This contract outlines what you are paying, what cooker you will receive, and any warranties or guarantees. The shop is bound to supply that specific cooker, and you are bound to pay the agreed price. Imagine the confusion if, after paying, the shop then announced a new, unexpected delivery charge.

Similarly, when you purchase a new unused car, a comprehensive contract is established. This covers the vehicle’s make, model, year, price, and payment terms. It also details any included services or guarantees. You expect a new car to be in good working order and remain working well for a long time. Such contracts are governed by law. Contractual terms cannot rewrite the law of the land, or event the common law. The contract ensures both you and the dealership understand your respective commitments. It protects you from receiving a different car than agreed, and it protects the dealership by securing your payment. The integrity of such transactions relies entirely on the terms being settled and known at the point of agreement.

Motivational drive

I’ve been in several situations over the years where contractual performance was the issue. I will give only snippets to avoid thousands of pages.

1. In the old days – I was quoted a price for my film to be ‘cleaned’ which means processed and turned into paper-based photographs. When I returned the person at the till of the large supermarket chain told me a price that was about 30% more. I politely protested. The response was “It’s the same for everybody. The price has gone up.” My response was, “I am not everybody – I am me and when I agreed to leave my film with you I was quoted a price which I relied on. If you and your business think your are right then you could charge me double or five times more because the new price applies to everybody. I’m not having that. Speak to a manager or your business is going to court with much speed.” End point: person at the till speaks with a manager and I’m given the price I was originally told.
2. Situation at Office World many years ago – I may have written about this before somewhere. I bought a shredder, 32 days later it failed to function through no fault of my own. I returned it to ask for a refund. A ‘manager’ goes, “It’s outside the 30 day period.” I go, “Not interested. Here is a copy of the Sale of Goods Act [from my hands printed as I was prepared] – now speak to your superiors else this is ending up in Court.” He goes, “It’s a Saturday I can’t find a senior manager.” I go, “So because you can’t find a senior manager this is going to end up in court in an open and shut case that will lead to egg on the face of your business. You should call somebody in your business anybody.” He returns and my refund was given – egg on his face. [Caution: this does not mean I threw eggs at anybody! FFS. Chrysst!! Do people on social media know anything about figurative language?]
3. About 10 years ago, British Gas threatened to cut off my gas for non-payment of £4000+ of a back-billing charge over 4 years. They nullified the charge before it reached the ‘steps of the court’.  It’s a much longer story of course, but I wasn’t giving in. Most of my associates and family said, “You’ll lose”. I said ‘We shall see’. We did see. Everybody was very silent after BG dropped the attempt to screw me over!
4. In a B2B contract at a mental hospital, your government decided to re-write the terms of their contract unilaterally with the hospital. Wait for it – the terms introduced were that any special observations (for suicidal patients) must be approved 2 weeks in advance of implementation of said observations. Are you awake! Yes – you who reads this. If you don’t believe the latter – know that I have a copy of the text of that unilaterally inserted contractual term nicely preserved. If you thought, that contractual term was dumbass then you are right. If you thought, “That’s business” – then you are the dumbass!
5. A year ago or so, I bought a washing machine. On properly unpacking it and set up, it was observed to be leaking. I emailed the company swiftly to say – with photographs – that the product was defective and I required a refund. They go, “We’ll send someone to assess and fix it.” I said, “No – according to the law, The Consumer Rights Act 2015, I am entitled to a refund based on evidence of a defect.” They dilly dally, draw the matter out over two weeks. It went up the ‘managerial tree’ on their side. Then they decided to send someone to assess. I told them that they might as well send the replacement with the someone. But no – they wanted to pull a fast one. So Mr Washing Machine Fixer Man turned up, checked it out and offered to repair it on the spot. I go, “No – the product is defective. I have sought a refund. I am not obliged to accept a fix.” A week later they pissed around. I was fine. They could piss all they like once it’s not at my property or foot. Finally, they sent a man with a new washing machine. Wait for it – their business base is 150 miles away from my home where the washing machine was located. It could have been sorted three weeks earlier and not necessitated their costs to send a Fixer Man out to me. But businesses are dumbass – and have money to burn.

There are more stories like the above but those for are just some that give me drive to write this article.

What Constitutes a Legally Binding Contract in UK Law?

This could be law 101. It is settled law for many decades.

In UK law, for a contract to be legally binding, there are generally four essential elements:

1. Offer: One party (the offeror) makes a clear and unambiguous proposal to another party (the offeree) to enter into an agreement. The offer must demonstrate an intention to be bound by its terms if accepted.
2. Acceptance: The offeree unequivocally agrees to all the terms of the offer. Acceptance must be communicated to the offeror. Silence generally does not constitute acceptance.
3. Consideration: Each party must provide something of value to the other. This doesn’t have to be monetary; it can be a promise to do something, a promise not to do something, or the provision of goods or services. In a rental agreement, the tenant’s payment of rent and the landlord’s provision of accommodation are examples of consideration.
4. Intention to Create Legal Relations: The parties must intend their agreement to be legally enforceable. In commercial or business agreements, this intention is generally presumed. In social or domestic arrangements, it’s often not presumed and needs to be proven.

Additionally, for a contract to be valid, the terms must be certain. If the terms are too vague or incomplete, a court may not be able to enforce the agreement.

Today’s scenario

I had a discussion with a landlady revolving around a situation where tenants, who had booked accommodation through Booking.com, were found smoking inside her property. This was explicitly against a contractual “no smoking” house rule, declared as such on Booking.com.

The core of the polite debate centred on a £250 charge or fine the landlady believed she was entitled to receive from the offending individuals for this breach. Her contract with Booking.com reportedly allowed for this sum. However, the point of contention I stated, was that clients were not informed of this specific £250 charge for smoking prior to, or at the time of, making their booking and accepting the initial terms. The landlady stated that this fine was communicated to clients almost immediately after the booking was completed, typically via a message on the Booking.com application or by email.

My perspective was that for such a specific financial penalty to be enforceable, it needed to be part of the contractual terms disclosed at the precise moment the booking was made and the contract struck. The notification of the fine even split seconds after the transaction was already finalised meant it could not be legally enforced. Although the “no smoking” rule itself was accepted as part of the initial agreement, the financial penalty for breaking it was introduced too late to be a valid contractual term. In this scenario too late could have been a microsecond after the contract was sealed.

So yet again I’m engaged by a situation – this one not affecting me at this time. Perhaps in the culturally accepted selfishness and self-centredness of the new ‘internet era’, I should mind my own business. Well tough. I do what I like. No bunch of idiots tells me what to do with my time.

Analysis of the Smoking Fine Situation

Now, let’s apply these principles to the landlord’s situation regarding the £250 smoking fine.

The landlord’s argument hinges on the idea that the £250 fine is a valid contractual term.

Here’s a breakdown:

1. The Initial Contract via Booking.com:
   • Offer: Booking.com (acting as an agent for the landlord) or the landlord directly presents the room for rent with certain terms (e.g., price, dates, “no smoking” rule). This constitutes the offer.
   • Acceptance: When the client clicks “book” and pays, they are accepting the terms presented to them at that moment. This is when the core contract for the room and the “no smoking” rule is formed.
   • Consideration: The client pays money; the landlord provides accommodation.
   • Intention to Create Legal Relations: This is clearly a commercial transaction.
2. The Timing of the £250 Fine Disclosure:
   • My Argument: For a term to be part of the contract, it must be known to the parties at the time the contract is formed. If the £250 fine was not displayed or linked to as a condition before or at the point of booking, it cannot be unilaterally imposed afterwards.
   • Landlord’s Argument: The landlord claims the fine is communicated “almost immediately after the booking.” This is the critical flaw, from a legal standpoint. A microsecond ‘almost immediately’ after is too late. End of.
   • Legal Principle: Incorporation of Terms: For a term to be incorporated into a contract, reasonable steps must have been taken to bring it to the attention of the other party before or at the time the contract is made. Subsequent notification of a new term, without fresh consideration or agreement, generally cannot unilaterally vary an existing contract. Think of it like buying a product online – you agree to the terms and conditions presented before you click “buy.” If, after you’ve paid, the company emails you new terms, you haven’t agreed to those new terms for that specific purchase.
3. Penalty Clauses vs. Liquidated Damages:
   • Even if the £250 term was incorporated into the contract, its enforceability might still be challenged depending on how it is framed. UK law distinguishes between “liquidated damages” clauses (a genuine pre-estimate of loss) and “penalty clauses” (designed to punish, not compensate).
   • If £250 is an arbitrary figure with no genuine relationship to the actual cost of cleaning or damage caused by smoking, a court might deem it an unenforceable penalty clause. However, this is a secondary point if the term wasn’t incorporated in the first place.

Conclusion on the Smoking Fine Situation:

Based on fundamental principles of UK contract law, if the £250 fine for smoking was not clearly communicated and available to the client before or at the moment they clicked “book” and paid, it is highly unlikely to be legally enforceable. The landlord sending a message “split seconds after completion of the transaction” is too late to incorporate a new term into the contract already formed.

The “no smoking” rule itself is part of the contract as it was disclosed at the time of booking. The landlord could likely claim for actual damages caused by the smoking (e.g., professional cleaning costs, redecoration if severe). However, a pre-set “fine” that wasn’t disclosed at the point of contract formation would be difficult to enforce.

Summary and takeaway points

You don’t need to be a lawyer to understand the fundamentals of contract law and apply the principles. All you need is a working brain! But if you are not gifted with a ‘working brain’, you could borrow some intelligence from at least five free AI resources on the internet.

Understanding the very foundations of contract law is crucial for everyone, not just those in business. As I have explored, a legally binding contract is fundamentally built upon terms that are known and agreed upon before the contract is formed. It is a common misconception that terms introduced even a split second after an agreement is made, can simply become part of that deal. This simply is not the case under UK law; once a contract is struck, the terms are set.

After is after. A millisecond after you fail to look right and step into the road, you’re run over by car – tough. Life is tough. After doesn’t care about you. It doesn’t forgive you. And similarly the law is clear that nothing ‘after’ a contract is formed, can be imposed into the contract. [For exception seekers – there are a few very minor excpetions, mainly in commercial law].

This principle underlines why it is so important for individuals, whether booking a holiday or making any significant purchase, to be aware of the terms and conditions right from the outset. Knowing the basics of contract law, which draws from both established common law principles and various statutes, empowers you. It ensures you understand your rights and obligations, helping to prevent unwelcome surprises and ensuring that what you agree to is truly what you receive. A little knowledge of these fundamentals can provide significant protection in our everyday dealings.

Exceptionally some commercial contracts contain clauses for varying other contractual clauses. That’s very rare in the world of consumer contracts for sales and services of various kinds.

And finally – always read the fineprint – and never be rushed to do so, is my personal position. I couldn’t give a monkey’s who frowns at me or gives me the looks. Of course, in a free and democratic society ‘everybody’ has choice and they are responsible for their own choices.