Invoicing and Conditions Flashcards

A consumer books a vacation package for $4,500 under a contract containing a valid price escalation clause. Eight days before departure, the registrant receives notice from the supplier of a $180 fuel surcharge increase. What is the registrant's correct course of action under Ontario Regulation 26/05?

Answer: Absorb the $180 increase personally, since price escalation is prohibited within 10 days of departure

Under Ontario Regulation 26/05, even if a valid price escalation clause exists in the contract, a registrant is prohibited from passing any price increase to the consumer if the increase occurs within 10 days of the scheduled departure date. The registrant must absorb the cost or, in practice, negotiate with the supplier — they cannot charge the consumer.

A consumer purchases a travel package with a pre-tax price of $2,800 under a contract that includes a properly drafted price escalation clause. Due to currency fluctuations, the supplier increases the price by $210. What right, if any, does the consumer have under TICO regulations?

Answer: The right to cancel and receive a full refund, because the increase exceeds 7% of the pre-tax price

$210 ÷ $2,800 = 7.5%, which exceeds the 7% threshold established under Ontario Regulation 26/05. When a price increase surpasses 7% of the pre-tax package price, the consumer is entitled to cancel the booking and receive a complete refund — not merely a partial credit. The 7% is calculated on the pre-tax amount, making the exact threshold a common area of error.

Under Ontario Regulation 26/05, which of the following is NOT a mandatory disclosure requirement in the written contract that a TICO-registered travel agent must provide to a consumer?

Answer: The name and direct contact details of the travel supplier's head office

Ontario Regulation 26/05 mandates that contracts include the registrant's own contact information and TICO registration number, the total price inclusive of taxes, a description of services, passenger names, travel dates, cancellation/refund conditions, and confirmation of whether insurance was offered or declined. The head office contact details of the upstream travel supplier are not a prescribed mandatory disclosure element in the consumer-facing contract.

A consumer purchases a package holiday. Three weeks before departure, the operator downgrades the accommodation from a confirmed 4-star hotel to a 3-star property at the same destination, citing overbooking. Under TICO's framework, how should a registrant classify this change and what must they do?

Answer: This is a material change; the registrant must promptly notify the consumer, who then has the right to accept the change or cancel for a full refund

A downgrade in the quality classification of accommodation (e.g., 4-star to 3-star) constitutes a material change under TICO's principles, as it significantly alters what the consumer contracted to receive. Upon a material change, the registrant must notify the consumer promptly and give them a clear choice: accept the modified arrangement or cancel and receive a full refund. Limiting the remedy to a price-difference partial refund is not sufficient.

A consumer pays a $600 deposit to a registrant on a Tuesday for a cruise booking, with the balance of $3,400 due in 60 days. The registrant intends to issue one consolidated invoice once the balance is paid. Under Ontario Regulation 26/05, when must the written contract be provided to the consumer?

Answer: At the time the deposit is received, before the consumer leaves the agency

Under Ontario Regulation 26/05, the registrant must provide the consumer with a written contract at the time any payment — including a deposit — is received. It is not permissible to wait until the full balance is collected. The contract at deposit stage must include all the prescribed elements, even if a final itinerary confirmation follows later.

A consumer purchases a non-refundable, non-changeable airline ticket from a TICO-registered travel agency. The invoice clearly states the non-refundable conditions. The airline subsequently cancels the flight entirely due to route discontinuation. The consumer demands a full refund. Which of the following best describes the consumer's legal position under TICO regulations?

Answer: The consumer is entitled to a full refund because the non-refundable condition governs consumer-initiated cancellations, not supplier failure to perform

Non-refundable fare conditions are contractual terms that apply when the consumer cancels or changes their own booking. They do not strip a consumer of their right to a refund when the supplier fails to deliver the purchased service. When an airline cancels the flight entirely, the service was not rendered and the consumer is entitled to a full refund — including the base fare — regardless of the 'non-refundable' label on the ticket. The registrant, as seller, must facilitate this recovery.