ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Thursday, August 4, 2016

Service Fees Are Annoying...But Not Bad Faith

A recent case out of the District of Connecticut, Singer v. Priceline Group, Inc., No. 15-cv-1090 (VAB), tackles an issue familiar to all who travel: service fees. The plaintiff, on behalf of a class, sued Priceline over the fact that service fees were added on to the price that he bid to pay for a hotel room. We've all been beset by service fees tacked onto the prices quoted for various travel-related items, from hotel rooms to flights, and to be honest I feel like I, to some extent, have just grown used to and resigned to them. The court seems to feel the same way about them here. The service fees weren't a breach of contract, since Priceline's Terms of Use explicitly stated that service fees might be charged above the quoted price, nor were they a breach of the covenant of good faith and fair dealing because, again, Priceline was upfront about the fact that Singer might owe more money in service fees from the hotel. Priceline never made any representation that it wouldn't provide Singer with quotes that might require further service fees and so did not act in bad faith when it did so in a way that the court found was open and reasonable.

I might wish that more places would just tell me the end price without the extra fees, but, for now, I think the widespread acceptance of these fees in the course of transactions indicates they're here to stay for the time being.

https://lawprofessors.typepad.com/contractsprof_blog/2016/08/service-fees-are-annoyingbut-not-bad-faith.html

Commentary, E-commerce, Recent Cases, Travel, True Contracts, Web/Tech | Permalink

Comments

In the EU, many such practices are outlawed regulatorily, esp. in relation to airline fees, to protect consumers as it is indeed often confusing to think one has one price, but the "total" price is then suddenly (think small print...) something else.

Posted by: Myanna Dellinger | Aug 4, 2016 2:09:06 PM

This really should be better known. It really wrecks the value of Priceline's scheme. The holding implies that if you submit a bid of $107/room and Priceline finds you a room that costs $107 plus a $100 mandatory resort fee, you have to accept that $207 hotel room. Does Priceline do this often? In principle, the mandatory fee could be $500 per room and you'd still be bound to pay it.

Posted by: Eric Rasmusen | Aug 12, 2016 1:49:58 PM

Yes, I was wondering about that. Where, exactly, is the limit? Is it a reasonableness thing? And what's a "reasonable" resort fee?

Posted by: Stacey | Aug 20, 2016 8:47:48 AM

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