Many times I will receive a phone call from an attorney asking if the terms and conditions in a passenger ticket are enforceable, including the one year time limitation in which to file a law suit, as well as the clauses in most passenger cruise ship tickets that dictate the location where the law suit must be filed. The answer is generally yes, the provisions are enforceable as the law is fairly well settled that forum selection clauses are enforceable if they pass a reasonable communicativeness test. The one year time limitation is authorized by federal statute.
The Supreme Court of the United States, in Carnival Cruise Lines, Inc., v. Shute, 499 U.S. 585 (1991), upheld the validity of a forum selection clause in a passenger ticket issued by Carnival Cruise Lines, Inc. The Supreme Court ruled that the forum selection clause did not violate the statutory prohibition against contractual clauses which unduly limit a shipowner’s liability for negligence.
The reasoning behind enforcement of these clauses was set forth our Supreme Court of the United States as follows:
Including a reasonable clause in a form contract of this kind, well may be permissible for several reasons: first, a cruise line has special interest in limiting the fora in which it potentially could be subject to suit. Because a cruise ship typically carries passengers from many locales, it is not unlikely that a mishap on a cruise could subject the cruise line to litigation in several fora. (Citations omitted). Additionally, a clause establishing ex ante the forum for dispute resolution has the salutary effect of dispelling any confusion about where suits arising from the contract must be brought and defended, sparing litigants the time and expense of pretrial motions to determine the correct forum and conserving judicial resources that otherwise would be devoted to deciding those motions. (Citations omitted). Finally, it stands to reason that passengers who purchase tickets containing a forum clause like that at issue in this case benefit in the form of reduced fares reflecting the savings that the cruise line enjoys by limiting the fora in which it may be used. (Citations omitted).
The enforceability of forum selection clauses depends on the “reasonable communicativeness”. The test to satisfy “reasonable communicativeness” has been set forth as follows:
First, a court must examine the facial clarity of the ticket contract and whether its language and appearance make the relevant provisions sufficiently obvious and understandable. The second prong focuses on “the circumstances of the passenger possession and familiarity with the ticket,” id., (Citation omitted).
Given this two-step analysis, it is obvious that the determination of enforceability must be made on a case –by-case basis…
The forum selection clauses and other provisions in passenger tickets will be enforceable if the cruise lines simply follows the law regarding the requirements for reasonable communicativeness. Since this issue has been litigated often in the Court, the cruise lines have continuously re-written their passenger tickets to comply with the case law. At least with respect to the major cruise lines, there is most likely an appellate decision upholding the validity of their passenger ticket provisions.
A common defense by passengers is they did not read the ticket. However the law is that if the passenger ticket passes the reasonably communicativeness test, the provisions are enforceable whether the passenger reads the provisions or not. Another common defense of a passenger with respect to the enforceability of the provisions in the passenger ticket is that the passenger claims it did not personally receive the ticket. Case law establishes that notice of the ticket can be imputed to passengers even if they did not personally receive the ticket. For example the ticket may have been received by their travel agent, or family member.
It is also important to keep in mind that all the cruise lines have internet sites which will contain the terms and conditions of passenger tickets. Anyone who is considering boarding a cruise, should go to the internet of that particular cruise ship company and be familiar with the terms and conditions of the passenger ticket. They will always contain provisions that will affect cancellation of cruises, encountering rough weather during the cruise, as well as many other situations that the cruise line deals with in their passenger tickets in an attempt to absolve themselves or reduce their liabilities for many mishaps that can occur during a cruise.