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Alex J.
Alex J., Solicitor
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Experience:  Solicitors 2 years plus PQE
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, We have a property that we rent out as a holiday home.

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Hello, We have a property that we rent out as a holiday home. Unfortunately, we MAY have to sell it this year. As we have already taken a number of bookings, if we should sell would we be liable if we had to cancel any holidays that had not been taken, other than returning any monies already paid? We do have a clause in our T&C's and would like to know if this would cover any other type of claim from a person who has booked a holiday with us. The wording in this clause reads: "CANCELLATION BY US: In the unlikely event of cancellation by the Owners prior to the start of your holiday, the Owner shall only be liable for the return of monies received. We will not be liable for any consequential loss you may suffer or pay any compensation to you or your party". Your advice would be much appreciated.
Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.
Hi,
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
The clause you have proposed should be fine save that:
(i) I would make sure it is clearly identifiable in the document and brought to the attention of the client;
(ii) It should say you exclude liability for "indirect and consequential loss";
(iii) It should also say "nothing in the agreement limits liability for death or personal injury caused by negligence or any liability for fraud or fraudulent misrepresentation" - with out this phrase a court may not enforce the limit on liability.
When you sell the property you should take the view that:
- You will disclose to the buyer any bookings already made;
- Account to the buyer for the monies received that relate to weeks that the buyer might own the property - it will then be up to the buyer to cancel these bookings.
I look forward to hearing from you.
Kind regards
AJ
Customer: replied 2 years ago.

Hi AJ

Thank you for your answer. The only thing is, is that if/when we have to sell the holiday property, it could be sold to someone who wants to actually live in the property, therefore, they could not take on our bookings. Does this make any difference to your advice, please? Thank you Pat

Expert:  Alex J. replied 2 years ago.
Hi,
Thank you.
If the buyer cannot take your bookings - then obviously there is nothing that can be done about that- but if the situation arisesthat you have secured bookings for say one more season, then ideally I would try and put the responsibility on buyer for managing these bookings and winding them down if possible.
If you cannot get the buyer to agree to these then accordingly you will have to manage the termination of these bookings. In that circumstance you will only have to rely on your limit of liability clause if you are sued (which is entirely the customers prerogative). A customer is only likely to be antagonised to sue you, if you have given an unreasonably short notice of termination. I would therefore bare in mind that if you sell, then you should ensure that the buyer gives you enough time to adequately notify the customers so you are not notifying them at the last minute and leaving your self in awkward position.
I would also note you should expressly include in the agreement a right to terminate the agreement prior to the commencement of any vacation.
Kind regards
AJ
Alex J., Solicitor
Category: Law
Satisfied Customers: 3557
Experience: Solicitors 2 years plus PQE
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Customer: replied 2 years ago.

Thank you, ***** ***** sorry but could you explain in more detail the sentence about "In that circumstance you will only have to rely on your limit of liability clause if you are sued (which is entirely the customers prerogative)" Do you mean that I do not need the additional wording "...indirect and consequential loss etc". Do you also mean that I could be sued by a guest for cancelling their holiday? We would be able to give about 3 months notice if we do sell. Many thanks

Expert:  Alex J. replied 2 years ago.
Hi,
Thank you.
What I mean is - the purpose of a limit of liability clause is to limit liability for contractual claims.
In this circumstance you are doing two things:
(i) Excluding liability for indirect and consequential loss;
(ii) Limiting your liability for direct losses to the equivalent sum of money you actually received.
In practice how will this work? You will cancel their holiday on three months (or other such period) notice and return their deposit or the sums already paid, they will either:
(i) Accept this in full and leave you alone; or
(ii) Complain to you that they do not think this is fair etc - regardless of what you write in an agreement this is entirely their prerogative to do so;
(iii) If they complain you will say you have a limit of liability clause and they will leave you be or (even if it is without foundation) they will choose to try and sue you.
(iv) If they sue you, a court will look at your limit of liability clause and hopefully say "you made them aware of the limit on liability" and "gave them reasonable notice" - their claim is without merit.
As explained for a customer to actually sue you, you would have to have a seriously bad breakdown of the relationship and this is only likely to happen where you have given very short notice (and in their mind ruined their vacation).
Have a limitation of liability clause cannot prevent someone from bring a court claim - it may prevent them from winning the claim. Ultimately if their claim is without merit they are probably less likely to bring it.
Kind regards
AJ
Customer: replied 2 years ago.

Thank you very much for all of your help and the information you have given to me - it is much appreciated. I will certainly be giving you excellent feedback.

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