US-Canada Point-of-Sale Commission and Fare Agreement Part I
Standard Terms and Conditions 1. Good Faith Dealing.
(a) Good Faith Dealing. Contractor will book and ticket all passengers and conduct itself in its dealings with passengers in accordance with each Carrier’s Conditions of Carriage and all other rules and procedures of each Carrier, as applicable. In addition, all travel using the Fare programs made available under this Agreement will be governed by each Carrier’s Conditions of Carriage. An overview of such rules and procedures is published at each Carrier’s website. Contractor will notify each Carrier if any Authorized Sales Outlet makes any bookings or sales that are not timely reported through ARC/IATA (including, for example, bookings or sales that Contractor makes through a direct connection to any airline’s internal reservations system) and thus could have an impact on performance or payment calculations under this Agreement. Contractor will not permit any Authorized Sales Outlet directly or indirectly to sell, transfer or otherwise move bookings or sales (by online auction, fulfillment contract or otherwise) to or from any other travel agency, reservation service provider, Internet travel site or other booking or sales location or outlet that is not an Authorized Sales Outlet for the purpose or with the effect of artificially improving Contractor's performance on each Carrier under this Agreement or assisting another travel agency or outlet in improving its performance under another incentive agreement with each Carrier. Contractor will not share any Commission payment made hereunder with any travel agency, provider, site, outlet or location that is not an Authorized Sales Outlet.
(b) Authorized Sales Outlets. Contractor represents that it has the exclusive power to control, direct, manage and supervise the policies, assets and operations of all air travel-related businesses that report bookings or sales through each of the respective ARC/IATA identifying numbers listed in the attached certification and, if such businesses are separately incorporated or otherwise conducted within a legal entity distinct from Contractor, Contractor owns and controls at least 51% of the voting equity securities (or other equivalent ownership interests) of each such business. Contractor further represents that it has the ability to and will cause its Authorized Sales Outlets to comply with all obligations, restrictions and conditions under this Agreement and agrees that any failure by any Authorized Sales Outlet to so comply will be deemed to be a breach of this Agreement by Contractor. All air travel-related businesses meeting the foregoing criteria and using the same ARC/IATA identifying number are referred to herein collectively as an ‘’Authorized Sales Outlet’’. Contractor further represents that each Authorized Sales Outlet reports its air ticket bookings and sales only through the assigned number identified to each Carrier and through no other identifier of such type assigned by ARC or IATA. An Authorized Sales Outlet may provide fulfillment or similar services for third parties, but bookings, ticket sales, passengers, revenues and the like derived from such services will not be credited to Contractor for performance measurement or Commission payment purposes. Contractor agrees to notify each Carrier within 5 business days if any such outlet no longer qualifies as an Authorized Sales Outlet. If Contractor wishes to add additional Authorized Sales Outlets, it will notify each Carrier using the form or other method prescribed by each Carrier. Such additional Authorized Sales Outlets will be covered by this Agreement only if approved by each Carrier in its sole discretion. Such inclusion will be effective immediately for purposes of newly approved Authorized Sales Outlet taking Upfront Commissions but with respect to Backend Commissions will become effective only as of the beginning of the first calendar quarter following such approval.
(c) Review and Certification. Each Carrier may from time to time require Contractor to conduct an internal review and certify to each Carrier that each Authorized Sales Outlet covered by this Agreement meets the foregoing criteria and each Authorized Sales Outlet’s bookings and sales have not been moved or otherwise manipulated in a manner that impacted the amount of any Commission payment made to Contractor by each Carrier. In addition, such certification will identify every air travel-related business, other than an Authorized Sales Outlet, in which Contractor has an ownership interest of any kind or with respect to which Contractor has any franchising, outsourcing, support or similar arrangement that confers on Contractor the ability to direct or influence the policies of such business. The certification must be made in the form and manner prescribed by each Carrier and returned to each Carrier within 30 days of the initial request. 2. Data and Discrepancies. All measurements and calculations under this Agreement will be based on data contained in each Carrier's records,
which will take precedence over data in any other records. Each Carrier may in its discretion truncate decimals and use rounding to simplify calculations. If for any reason each Carrier determines that there are not sufficient data to process measurement or payment calculations hereunder, then such Carrier will process such calculations using other reasonably equivalent data selected by each Carrier in its sole discretion to approximate the incentive purposes of this Agreement. Contractor must send each Carrier written notice of any dispute or discrepancy regarding the amount of any Commission payment within 30 days of the date such payment is received. Contractor will have no right to challenge a payment if Contractor fails to raise such dispute or discrepancy within such time frame. Contractor agrees to promptly reconcile all billings and debit memos received from each Carrier as well as any other debts owed by Contractor to each Carrier. All billings and debit memos, as well as any other debts owed by Contractor to each Carrier, must be paid within the time frame specified, or if not specified within 60 days of the date shown on the memo, billing or invoice. If these amounts are not timely paid, each Carrier will have the right either to (a) withhold all payments hereunder, (b) set off against all payments due hereunder the amount of such billings or debit memos or any other outstanding debts, and/or (c) terminate this Agreement and exercise its remedies under this Agreement or under law or equity.
3. Compliance with Applicable Laws. Contractor represents to each Carrier that Contractor is, and throughout the term of this Agreement will remain, in compliance with all applicable laws, regulations and orders governing its business that pertain to this Agreement, including, without limitation, assembling, promoting, offering, booking, ticketing and selling travel marketed or operated by each Carrier and each Carrier’s Airline Affiliates.
4. Default and Termination. Each Carrier may terminate its participation to this Agreement in whole or part for its convenience without cause or penalty upon at least 30 days prior written notice to the other parties. A partial termination will be effected through termination of a specific Attachment and will not impact the effectiveness of another Attachment unless the entire Agreement or such other Attachment is also terminated. If either party defaults in its performance of this Agreement, and the default continues for ten (10) days following written notice from the non-defaulting party to the defaulting party, then the non-defaulting party may terminate this Agreement, and/or pursue any remedy available to it under this Agreement, in law and/or in equity. In addition, either party may, in its discretion, terminate this Agreement immediately upon written notice to the other party upon the occurrence of any of the following events, and/or pursue any remedy available to it under this Agreement and/or in law or in equity: (i) if the other party breaches its confidentiality obligations set forth herein and such breach causes, or is likely to cause, material harm to the other party not susceptible to cure; (ii) upon suspension or termination of Contractor’s appointment as an approved ARC or IATA agent of each Carrier regardless of who initiated the suspension or termination; or (iii) if bankruptcy or insolvency proceedings are commenced concerning the other party. Each Carrier also may, in its discretion, terminate this Agreement immediately for default upon written notice to Contractor, and/or pursue any remedy available to it under this Agreement and/or in law or in equity, if (a) Contractor’s stock or assets are acquired or Contractor is merged into another company or undergoes a change in control; (b) each Carrier terminates another contract with Contractor for default; or (c) each Carrier announces a general change to its Commission policy in a country in which Contractor’s activities hereunder are conducted. In the event each Carrier terminates this Agreement with or without cause, any Commission payments which have not yet been paid to Contractor shall be deemed waived by Contractor; provided that if such termination is by each Carrier without cause after the completion of a quarterly or other performance period but prior to processing of Commission payments for such period, such Carrier will process and pay any such Commission payments not yet processed. Appendices to this Agreement may contain additional termination rights. In addition to the above, if each Carrier in good faith believes that Contractor has violated any provision of Sections 1 or 11 of these Standard Terms and Conditions, then upon notice to Contractor, such Carrier may withhold any amount otherwise due to Contractor under this Agreement for the most recent quarter for which payment has not yet been made, until the breach is remedied to each Carrier’s reasonable satisfaction. If the breach is not remedied prior to the termination or expiration of the Agreement, any amounts withheld by each Carrier will be deemed unearned by Contractor, and Contractor waives any claim to those amounts. The exercise by each Carrier of this right to withhold payment will not preclude each Carrier from exercising any other right that such Carrier may have under this Agreement, in law and/or in equity including termination of this Agreement.
5. Modifications. The Carriers may modify this Agreement or any Attachment, including modifications to Commissions and Fares, by sending Contractor a revised Agreement or Attachment, at least 30 days prior to effectiveness. In the event that Contractor rejects such modifications, Contractor may terminate this Agreement upon at least 15 days written notice prior to the effectiveness of the modification. Notwithstanding Section 29, Contractor shall be deemed to accept the modification if Contractor fails to notify a Carrier of its intent to terminate 15 days prior to its effectiveness.
6. Change in Structure. Contractor will notify each Carrier in writing of any material changes to Contractor’s organizational structure including (but not limited to) any mergers or consolidations, sales of all or substantially all of Contractor’s assets or other changes of control of Contractor. Upon notice of a material change in Contractor’s organizational structure, each Carrier may terminate this Agreement as provided above or at its discretion each Carrier may review with Contractor the terms and conditions of this Agreement to determine what amendments, if any, are necessary in light of Contractor’s new organizational structure.
7. Trademark and Domain Name. This Agreement or performance of this Agreement will not give or transfer to Contractor any right, property,
license, permission or interest of any kind in or to any trademark, tradename, trade dress, service mark, domain name, logo, copyright or other indicia of ownership owned or used by each Carrier or its affiliates (‘’Carrier’s Marks’’) other than the limited non-transferable, nonexclusive right of Contractor to use each Carrier’s Marks during the term of this Agreement for the purpose of marketing and selling transportation on a Carrier, subject to Contractor’s compliance with this Agreement, the ARC Agreement, a Carrier’s ARC Addendum and IATA Agreement. Any such use shall inure to the benefit of each Carrier. Contractor shall in no way contest or deny the validity of, or the right or title of each Carrier in or to, each Carrier’s Marks, and shall not encourage or assist others directly or indirectly to do so. Contractor shall not use or register any trademark, tradename, trade dress, service mark, or domain name that is identical to or confusingly similar to any of each Carrier’s Marks. If Contractor is permitted by each Carrier to use any each Carrier’s Mark, Contractor shall not (i) alter each Carrier’s Mark in any manner, (ii) utilize each Carrier’s Mark in any manner that would diminish its value or harm the reputation of each Carrier, or (iii) use each Carrier’s copyrights by framing them or spoofing each Carrier’s Internet URL. Contractor agrees that it will not create, acquire, license or support any internet keyword or search term which contains an each Carrier’s Mark and can locate or identify or create a link to Web sites or pages based on specified search criteria.
8. Promotional Materials and Advertising. Contractor’s publication or use of any promotional materials (including, but not limited to all artwork, scripts, copy, advertising, direct mail, press releases, newsletters, brochures, flyers, web graphics, newspaper and/or magazine advertisements or other communications or any other publicity) or internet, radio, television or other advertisements, if any, may use or display each Carrier’s Marks only with each Carrier’s prior review and written approval in each instance. Each Carrier may, however, grant blanket approval for certain types of uses or displays. Contractor shall utilize the corporate graphic standards as provided by each Carrier to prepare any such promotional materials. Upon approval by each Carrier, Contractor shall not change approved final proofs without first obtaining each Carrier’s approval.
9. Indemnification. Contractor will defend, indemnify and hold harmless each Carrier, and its affiliates, and each of their respective officers, directors, agents, and employees, from and against any and all liabilities, losses, fines, penalties, damages, and expenses (including reasonable attorneys fees) and costs arising from a claim, demand, proceeding, suit or action by a third party relating to, arising out of or resulting from (i) Contractor's failure to perform or improper performance under this Agreement or breach of any representation or warranty set forth in this Agreement, (ii) any negligent acts or omissions of Contractor, (iii) the operation of Contractor’s business, or (iv) Contractor’s failure to comply
with applicable law, including, without limitation, if Contractor makes any false or misleading claims or statements in its advertising or promotional activities.
10. Force Majeure. No party will be in breach of this Agreement if it is unable to perform as a result of any force majeure, including without limitation, an Act of God, act of governmental authority, quarantine restrictions, fire, flood, inclement weather, riots or civil commotion, strikes, lockouts, labor disputes, (whether resulting from disputes between each Carrier and its employees or between other parties), war, acts or threats of terrorism or any other acts, matters, or things beyond the reasonable control of such party.
11. Confidentiality. Each party will keep confidential all provisions of this Agreement, Fare programs and the Commission payments each Carrier makes to Contractor under this Agreement (unless required by law or judicial process after making reasonable efforts to resist disclosure, if requested to do so by the other party) will not disclose any of the same to any third party without obtaining the prior written consent of the other party, other than (i) the receiving party’s directors, officers, employees or agents to the extent such persons are bound by equivalent confidentiality commitments and have a legitimate need to know in order for the receiving party to perform its obligations or exercise its rights under this Agreement and (ii) in the case of each Carrier, representatives of any of a Carrier’s alliance carriers including oneworld Alliance carriers (and with respect to both historical and current provisions, Fare programs and payment information), to the extent that such alliance carriers are similarly bound to maintain the confidentiality of such information as it relates to Contractor. These provisions will survive the termination or expiration of this Agreement for any reason.
12. Ownership and Distribution of Fare Content. Contractor acknowledges that each Carrier’s Fares, schedules and inventory information are and shall remain the sole property of each Carrier. Without each Carrier’s prior written approval, Contractor may not re-market or re-distribute Fares (or, if relevant, packages that include each Carrier Fares) to or through other distributors, agents or intermediaries, except for the following authorized persons or entities: (i) persons or entities that have been expressly approved in writing by each Carrier and which have acknowledged the foregoing property rights of each Carrier and agreed to the restrictions set forth in this paragraph if and as required by each Carrier or, (ii) in the case of unpublished Fares (and packages), non-ARC/IATA accredited entities that do not re-market or redistribute such Fares via web sites or other electronic outlets. Contractor agrees that it is the intent of the parties that Contractor and any such authorized persons or entities market and sell Fares (and packages, if relevant) directly to end users. In addition, Contractor may not permit Fares (or packages that use each Carrier Fares) to be accessed or displayed on or via web sites or other electronic outlets other than Contractor’s own sites that do not display the brand of another distributor, travel agent or intermediary or sites that have been expressly approved in writing by each Carrier. For example, without each Carrier’s prior written approval, Contractor will not permit Fares to be accessed or displayed on or via co-branded or white label websites or electronic outlets; even if such sites or outlets tie back to or otherwise use Contractor’s ARC/IATA location numbers for ticket issuance or fulfillment. Contractor will take all reasonable steps to prevent any website or electronic outlet operated by Contractor from being used by unauthorized third parties (e.g., screen scrapers) for purposes of accessing Fares (or packages) or other unauthorized purposes.
14. Data Security. Contractor will establish, implement and maintain technical and organizational safeguards against the unauthorized disclosure, access, use, destruction, loss, damage or alteration of data owned or to be owned by each Carrier that is in the possession of Contractor or its agents, all in compliance with applicable law and regulation, including any privacy or data protection statutes in the United States, United Kingdom and European Union, that shall be no less rigorous than (i) industry standard practices in the transportation and related services industry, and (ii) reasonable security procedures and practices appropriate to the nature of such Carrier’s data. For the avoidance of doubt, such data safeguards must include compliance with VISA, MasterCard and any other applicable credit card network bylaws and operating regulations and federal and state laws and regulations relating to credit card processing
15. Relationship of Parties. Persons employed by either party will not be held or construed to be employees of the other party. Notwithstanding the fact that Contractor has agreed to follow certain procedures and instructions of each Carrier, each Carrier will have no supervisory power or control over any employees, agents or contractors engaged by Contractor in connection with this Agreement. Each party understands and agrees that this is a non-exclusive agreement and that each party may enter into similar agreements with third parties.
16. Taxes. Contractor will pay to the appropriate taxing authorities or remit to each Carrier, as applicable, all U.S. and non-U.S. federal, state, provincial and local taxes, charges, duties, customs fees, or other assessments that are levied on Contractor under the laws of any country or other governmental authority, or that result from, or are attributable to Contractor’s booking or selling travel on a Carrier, or any income received by Contractor under this Agreement. If Contractor remits any such taxes to each Carrier, it shall so indicate in writing upon the remittance.
17. Complete Agreement; ARC and IATA Agreements. This Agreement including its exhibits and appendices (including these Standard Terms and
Conditions), represent the complete, final, and exclusive agreement between each Carrier and Contractor with respect to the subject matter hereof; provided, however, that nothing in this Agreement will be deemed to modify or supersede any of the provisions of the IATA Passenger Sales Agency Agreement or Agent Reporting Agreement (including each Carrier’s Addendum to the ARC Agent Reporting Agreement), as may be amended from time to time and any successor thereto, to which the parties agree that they are bound and which includes, without limitation, the ability of each Carrier to remove the ability of Contractor to sell each Carrier’s inventory, i.e., pull Contractor’s plates.. Contractor
acknowledges that under the ARC Agreement and each Carrier’s ARC Addendum, each Carrier has a unilateral right to amend the Carrier’s ARC Addendum and, through the Carrier’s ARC Addendum, the ARC Agreement. In addition to any rights or remedies available to each Carrier under its ARC or IATA agreements with Contractor, each Carrier may debit memo Contractor (or its affiliates, sub-agents or third party distributors, as applicable) for any deficiency or loss incurred by each Carrier by reason of Contractor improperly issuing a ticket, misusing a Fare, failing to comply with a Fare rule, improperly taking a Commission, failing to collect a tax, fee or charge or to properly remit monies due each Carrier or otherwise failing to comply with this Agreement. Contractor will be responsible for paying these amounts.
18. Assignment; Subcontractors. Contractor shall not transfer or assign this Agreement, or any right or obligation under this Agreement, by operation of law or otherwise, without the prior written consent of each Carrier. Contractor will cause its authorized subcontractors, agents and third party distributors to comply with the terms and conditions of this Agreement and will be liable to each Carrier for any of their booking, ticketing, and other activities related to this Agreement.
19. Waiver. A failure or delay by a Carrier to this Agreement to require strict performance or enforcement of any provision of this Agreement or a previous waiver by a Carrier of any performance or provision shall in no way be construed as a waiver or continuing waiver of any provision of this Agreement by that Carrier.
20. Severability. In the event any one or more of the provisions of this Agreement shall for any reason be held to be invalid, illegal, or unenforceable, the remaining provisions of this Agreement shall be unimpaired. The invalid, illegal, or unenforceable provisions shall be replaced by a mutually acceptable and valid provision that comes closest to the intention of the parties underlying the invalid, illegal, or unenforceable provision.
21. Books and Records. Contractor shall at all times keep complete and accurate books, records and accounts from which each Carrier can determine Contractor’s performance under this Agreement over the preceding two years. The books, records, and accounts of Contractor pertinent to this Agreement shall be retained for a period of at least two (2) years after the termination or expiration of this Agreement. These books and records will, at all reasonable times, be accessible to and open for inspection, examination, audit and copying by each Carrier. 22. Governing Law. This Agreement will be governed by and interpreted pursuant to the laws of the State of New York without giving effect to its
principles of conflicts of law.
23. Notice. Unless otherwise provided in this Agreement, any notices under this Agreement shall be in writing, and shall be delivered in person or by a recognized courier or mail service that provides acknowledgement of receipt. Notices shall be addressed to the party at the address set forth in this Agreement, or as a party may designate for itself from time to time by written notice to the other party.
24. No Third Party Beneficiaries. Except as otherwise expressly provided in this Agreement, no provision of this Agreement is intended to create any rights in persons or entities other than the parties hereto, their successors and permitted assigns.
25. Counterparts and Signatures. This Agreement may be executed in any number of counterparts with the same effect as if all parties hereto had signed the same document. Execution may be effected by delivery of electronic copies of signed signature pages (and the parties will follow such delivery by prompt delivery of originals of such pages). Electronic copies will have the same binding effect as original signatures.
26. Further Assurances. Contractor will execute and deliver such further documents and instruments as each Carrier may reasonably request to effectuate the purposes of this Agreement.
27. Consequential Damages. NO PARTY WILL BE LIABLE TO THE OTHER PARTIES FOR ANY CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES
ARISING FROM ANY PERFORMANCE OF THIS AGREEMENT OR ANY BREACH OR DEFAULT UNDER THIS AGREEMENT, EXCEPT FOR A PARTY’S INDEMNIFICATION OBLIGATIONS OR BREACH OF OBLIGATIONS REGARDING CONFIDENTIALITY, DATA PRIVACY, DATA SECURITY OR USE OF A CARRIER’S MARKS.
28. Attorneys Fees. In the event that any legal proceeding at law or in equity arises in connection with this Agreement (including any appellate proceedings or bankruptcy proceedings), the prevailing party shall be awarded costs, reasonable expert witness fees, and reasonable attorneys' fees incurred in connection with such legal proceedings.
29. Survival. Provisions of this Agreement which are to be performed after termination to effectuate the intent and purpose shall survive termination of this Agreement.
30. Amendments. This Agreement may be amended and/or supplemented only by written agreement of the applicable parties or as otherwise expressly provided for in this Agreement. For the avoidance of doubt, in the case of an Agreement between Contractor and the Atlantic Joint Business, amendments must be agreed to in writing by the Contractor and each Atlantic Joint Business Carrier, but not JAL; and amendments to an Agreement between the Contractor and the Pacific Joint Business should be agreed to in writing between the Contractor and the Pacific Joint Business Carrier, but not BA and IB.
30. Successors and Assigns. This Agreement shall be binding upon, and shall inure to the benefit of each of the parties hereto and their respective successors and permitted assigns.
31. Representations and Warranties. Contractor represents and warrants to each Carrier that (a) Contractor has full power to conduct its business as presently conducted, including the marketing, ticketing or other activities contemplated by this Agreement, (b) Contractor has all requisite power and authority to execute, enter into and carry out the terms and conditions of this Agreement and to perform its obligations under this Agreement, (c) neither the execution or delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will conflict with or result in the breach of any term or provision of, or constitute a default under any contract or law to which Contractor is a party or by which Contractor is bound, (d) this Agreement has been duly executed and delivered and is a legal, valid and binding agreement of Contractor, enforceable in accordance with its terms, except to the extent such enforceability is limited by bankruptcy, insolvency, reorganization or other similar laws or principles of equity, and (e) no consent, approval, or filing with, any governmental authority is required on the part of Contractor in connection with the transactions contemplated by this Agreement, except for those consents that have already been obtained.
32. Refunds. All refunds to passengers shall be Contractor’s responsibility. If Contractor fails to promptly make any required refund, each Carrier shall have the right but not the obligation to make such refunds to passengers and on demand collect from Contractor such payments, which will include any Commission deducted. Contractor shall have the right to establish its own refund policy provided that such policy shall not be inconsistent with each Carrier’s Conditions of Carriage.