Q: This week, Travelport sent my agency a new GDS contract. The good news is that they are forgiving my agency’s huge, pandemic-related shortfall if I sign the new one. However, the new contract looks nothing like the old one, as it appears to be Travelport’s attempt to have one contract for the entire world. Have you found anything in it that should discourage me from signing this new form?
A: The new form of GDS agreement contains standard terms and conditions that are 17,544 words long, which is nearly four times as long as the one it supersedes. My preliminary review reveals that there are many strange and unintelligible clauses that should dissuade you from signing it in its current form. Here are just a few examples.
First, segment incentives get paid as follows: “Where due, productivity incentive payments shall be made within 60 days of Travelport’s receipt of subscriber’s valid tax invoice following the end of the relevant year, provided Travelport receives subscriber’s valid tax invoice within 90 days of the end of the relevant year. If a valid tax invoice is not received by Travelport within 90 days, Travelport reserves the right not to pay the productivity incentive.”
Most U.S. travel agencies don’t even know what “tax invoices” are, let alone know how to prepare or send them. Much later, the agreement states, “For the avoidance of doubt, subscribers located in the United States are deemed to receive self-bill invoices.” My doubts are not avoided.
Second, U.S. travel agencies have to agree to many data-protection clauses whose meaning will be unknown to most such agencies, such as this: “Subscriber shall provide notification to each data subject, in accordance with the data protection laws, that it is a data controller and of the data processing activities conducted pursuant to this agreement. It shall also advise each data subject that it is the primary point of contact for any data subject requests.”
So, advisors must waste time communicating with clients about terms that neither understands.
Third, Travelport may terminate the agreement if “subscriber’s BSP ticketing authority is removed on vendor’s equivalent to 50% of more of subscriber’s segment volume in the preceding calendar month.” I have no idea what that means or why it would justify termination.
Fourth, the agreement is governed by the laws of “the territory in which Travelport is registered,” and the travel agency consents to be sued in that territory. Under U.S. law, this does not mean anything at all, as Travelport is “registered” in all states.
I have to assume that, due to the pandemic, Travelport terminated the employment of everyone in its U.S. legal department. How else would this strange agreement have slipped by?
If this new GDS contract were an incidental agreement that a typical travel agency needs to sign, such as a contract with an internet service provider, these would probably not matter much. However, for many agencies, their GDS contract is their most lucrative and longest-term agreement, so what it says really matters.