Hospitality law

From Wikipedia, the free encyclopedia

Hospitality law is the body of law relating to the foodservice, travel, and lodging industries. That is, it is the body of law governing the specific nuances of hotels, restaurants, bars, spas, country clubs, meeting and convention planners, and more.

Hospitality law doesn’t just involve one area of law. It encompasses a wide variety of practice areas, including contracts, antitrust, tort law, and more.

Recent events have made hospitality law even more relevant. Food allergies are on the rise, making it increasingly important for restaurants to not only train staff about ingredients but to also have appropriate labels for food containing peanuts or wheat. The Mumbai terrorist attacks, which included a hostage situation at the Taj Mahal Hotel, among other places, and the 2009 Jakarta bombings at the JW Marriott and the Ritz-Carlton hotels, raise questions about what a hotel can legally do to ensure the safety of its guests.

Overview

While hospitality law covers many different entities, hotels and restaurants are the two most common hospitality businesses.

Hotels

Hotel operators in the United States have a duty to their guests and to their guests’ property.

Duty to guest

Lodging operators have a duty of care to their guests. This duty does not insure the guests’ safety, but does require the operator to “act prudently and use reasonable care.”[1] This means, among other things, that an operator can be held liable if he or she is found negligent.

An operator also must ensure that all of the guests’ personal information is retained and destroyed according to proper and recommended procedure.

Duty to guest property

Common law held innkeepers liable for any loss of guest property when the guest was on their property. Nearly all states have abrogated that duty, placing limits on an innkeeper’s liability, as long as the innkeeper complies with certain requirements. These requirements, usually regulated in the state’s innkeeper statute, govern the placement of the law (many statutes require that the statute be placed in a common area, at the front desk, or behind the door of the room) and the size of the text of the displayed statute. Generally, to be protected under the statutes, the innkeeper and his employees cannot be complicit in the theft or the loss of property. Lastly, the innkeeper usually has to provide a safe for the safekeeping of the guests’ property.

American statutes also govern bailments. A bailment is the “delivery of an item of property, for some purpose, with the expressed or implied understanding that the person receiving it shall return it in the same or similar condition in which it was received, when the purpose has been completed.” [2] Coat checks, safety deposit boxes, and luggage storage are common examples of bailments for the hospitality industry. It is important for lodging and restaurant[3]operators to understand that they are responsible for the safety of the guest’s property when a bailment is established.

Restaurants

Restaurant operators in the United States have a duty to sell food that is merchantable, that is, suitable for buying and selling.[4] “Truth in Menu” laws govern descriptions of food in menus. These laws ensure that the customer receives what the menu says he or she will (e.g., one dozen oysters for a certain amount, instead of 11 oysters). They also govern the ingredients, nutritional descriptions, preparation style, and more. For example, a bill once introduced to the New York City Council required that the use of the words “homestyle” or “homemade” refer to dishes prepared “from scratch.”[5]

The federal government has had a long history of regulating food advertisement and sales. In 2003, the U.S. Food and Drug Administration (FDA) began to require labels to include trans fat content.

The National Restaurant Association produces a helpful guide for restaurateurs - A Practical Guide to the Nutrition Labeling Law -to help the restaurant industry understand what nutrition claims it can make on its menu items.

Relation to other laws

Anti-trust

Anti-trust laws regulate business conduct to preserve competition and to prevent economic coercion. Hotel operators should not enter into an understanding regarding 1) room rates and conditions and terms of providing rooms or 2) scope of operations.[6]

It is important to remember that a hotel operator is ordinarily responsible if its managers or employees violate antitrust laws.

Contracts

There are two main types of contracts applicable to the hospitality industry: franchise contracts and management contracts.

A franchise agreement dictates the terms, rights, and responsibilities between the franchisee and the franchisor. It covers termination policies, each party’s responsibilities, indemnification, and more. Franchise agreements should be carefully reviewed by an attorney.

A management contract covers the duties and responsibilities between a management company and the business owner. Management contracts covers fees, the management company’s investment or ownership, exclusivity, and more.[7]

Tort laws

Torts, including negligence (as described above), intentional acts, assault, and more, are also relevant for the hospitality industry. Lodging operators need to be aware of their duties to guests in parking lots. Restaurant operators that serve alcohol should also be aware of their duties to their guests when patrons become belligerent or hostile to each other or to other guests.

Nuisance abatement

Like other businesses, hotel and motel properties are subject to a long list of health, fire safety, taxation, business licensing, municipal property standards and other local regulation. They may also be targeted by civic officials under nuisance abatement laws which hold the owners (or the management) of a property liable if criminal activity by clients results in repeated calls for service from police in a given timeframe.

Additional requirements apply to liquor license holders, such as the requirement to avoid serving intoxicated persons and enforce a legal-minimum drinking age for bar patrons. In some jurisdictions (such as Ontario, Canada) specific training is required for management and wait staff in establishments where liquor is sold.

International hospitality law

In many parts of the world, the hospitality industry is referred to as the “travel and tourism” industry or the “tourism” industry.

Several global organizations are in place to improve and promote the global travel industry, including the World Tourism Organization (WTO), the International Civil Aviation Organization (ICAO), and the World Health Organization(WHO).

Resources

Organizations

Organizations such as the National Restaurant Association and the American Hotel & Lodging Association are resources for their respective industries.

Textbooks

Hospitality Law by Stephen Barth[8] and Understanding Hospitality Law by Jack P. Jeffries and Banks Brown,[9] cover the various legal issues affecting the industry.

The Laws of Innkeepers by John E.H. Sherry[10] provides an in-depth analysis of the laws affecting places of public accommodation.

Notes

  1. ↑ Barth, Stephen. (2009). Hospitality Law. p. 261.
  2. ↑ Barth, Stephen. (2009). Hospitality Law. p. 314.
  3. ↑ While the bailment section is discussed under lodging, the concept is also application to restaurant operators, since many have coat checks.
  4. ↑ Barth, Stephen. (2009). Hospitality Law. p. 329.
  5. ↑ Jeffries and Banks. Understanding Hospitality Law. Fourth Edition.
  6. ↑ Jeffries and Banks. Understanding Hospitality Law. Fourth Edition. p. 472. Please see this resource for more specific examples of prohibited activity for operators.
  7. ↑ The leading reference on hotel management contracts is entitled The Negotiation and Administration of Hotel Management Contracts by James Eyster and Jan de Roos (2009) and can be obtained through the Cornell University Book Store.
  8. ↑ Third Edition, Published by Wiley
  9. ↑ Fourth Edition, Published by Educational Institute of the American Hotel & Lodging Association
  10. ↑ Third Edition, Published by Cornell University Press
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