What Being Dragged Off a United can Flight Teach Us about Contract Law?

April 18, 2017 Business planning, Law, Litigation, Small Business Comments Off on What Being Dragged Off a United can Flight Teach Us about Contract Law?

Unless you’ve been in a coma for the past week or so, you’ve probably seen the cell phone camera footage of airport police dragging a kicking and screaming Dr. David Dao off a United Airlines flight at Chicago’s O’Hare Airport last week.

At this point, the story is well known.  United needed to get four additional flight crew employees on Dr. Dao’s flight, so they asked paying customers to give up their seats voluntarily, for increasing levels of compensation.  When there were no takers, United selected four passengers “at random” for involuntary removal from the flight.  Dr. Dao was one of the “lucky” four selected.  However, when the time came to make the walk of shame down the aisle and off the plane, Dr. Dao refused to get up.  That’s when airport security was called in to physically remove him and cell phone cameras started to roll.

This fiasco, and the seemingly incessant media coverage thereof, has been a PR nightmare for United Airlines.  It has also brought an unprecedented amount of attention to the legal term “contract of carriage.”  Simply put, a contract of carriage is an agreement between a carrier of goods or passengers (such as an airline) and the consignor, consignee or passenger. These agreements define the rights, duties and liabilities of both the airline and the passenger.

You agree to your chosen airline’s contract of carriage when you buy your ticket.  The very broad framework for these agreements is established by federal law and the FAA (for domestic airlines), but the contracts can, and do, vary considerably from airline to airline.  Among other things, in your contract of carriage, you agree that you can be bumped from your seat due to overbooking, or because the airline needs to move employees.  You also agree (at least in the contracts of carriage for the four largest U.S. carriers) that you can be removed from or denied boarding to the plane for the following reasons (among many others):

  1. You decided shoes are overrated – boarding can be denied to those who are barefoot or not properly clothed.
  2. You decided showering is overrated – airlines can refuse to board individuals who have or cause a malodorous condition.
  3. You spent your entire long layover in the airport bar – airlines don’t have to board folks who appear to be intoxicated or under the influence of drugs to the degree that they could endanger other passengers or crew members.
  4. You spent your entire long layover in the airport’s all-you-can-eat buffet – if you are unable to sit in a single seat with the seat belt properly secured or are unable to put down armrests between seats for an entire flight, the airline isn’t obligated to give you a seat (or two).

What can we learn from all of this (other than to make sure to wear shoes to the airport)?  I think the takeaway is that even if we don’t know we’re doing so, most of us enter into legal agreements (i.e. contracts) multiple times each day, and it behooves us to know (and when we can do so, also to control) what is in those contracts.

This is especially important in your business.  Do you have a written contract with your vendors/suppliers/customers?  If not, then what happens if there is a dispute?  What is the basis of your agreement?  An email chain?  A phone call?  A face-to-face meeting that ended with a handshake?  If you do have a written contract, when was the last time you looked at it?  Do you understand the language in the contract and your rights and responsibilities under that language?  Have you had a trusted, experienced attorney review the contract to make sure it is in your best interest?

As Dr. Dao’s experience has taught us, the consequences of a contract can be serious, and can even put us in the national spotlight.  Taking the time to review and, if necessary, to change the contracts that you rely on to run your business is absolutely worth the time and effort.  The few hundred bucks you might spend could save you thousands in defending or pursuing a lawsuit regarding a poorly drafted or non-existent contract.

About the author

Jarom brings a wealth of experience in several diverse areas of law, but focuses his practice primarily on business formation and transactions, real estate, trademarks, estate planning, self directed IRA law, and civil litigation. Jarom has spent much of his practice helping entrepreneurs and small business owners across the country navigate the trials and tribulations of starting and operating a business. He has helped clients set up hundreds of business entities, drafted multifaceted business and real estate agreements, and represented companies large and small in complex contract, intellectual property and real estate litigation. He also routinely helps clients obtain and protect trademarks and other intellectual property.