Legal issues apply to hospitality enterprises in a variety of operational areas from bookings to purchasing to human resources and a wide spectrum of other activities. The broad areas of legal exposure applying to the hospitality industry are contract law, liability exposure, obligations imposed on hospitality companies by specific legislation, such as the Americans with Disabilities Act (ADA). These two broad areas provide the framework for the discussions presented in this chapter.
A contract is an agreement between two or more parties that is enforceable in a court of law. This agreement creates an obligation for the parties involved to take or not to take a specific action. Enforcement of a contract, if not discharged voluntarily, must occur through a court of law. A legal contract is binding on all parties to the contract. The liability exposure inherent in a contract argues written contracts, as opposed to oral agreements.
An express contract is the actual agreement between the parties, wherein an open declaration of the terms of agreement in distinct and explicit language occurs at the initiation of the contract. The typical express contract is a written document; however, contract enforceability does not depend on the existence of a written agreement. As an example, an innkeeper who contracts to provide a specified type of accommodation must provide that type of accommodation. A town room is not a legal substitute for a specified luxury room.
An implied contract occurs through inference by law, as a matter of reason and justice, stemming from the acts or conduct of the parties involved. Am implied contract arises when the circumstances surrounding a transaction between parties makes it reasonable, or even necessary, to assume that a contract exists between them by tacit understanding. Frequently, the parties to an implied contract behave toward one another as though an express contract existed. Such conduct...