What Is in a DMC Contract? The Four Clauses That Decide a Bad Day

Nobody reads the contract. Everybody signs it, files it, and gets on with selling the trip, and for the overwhelming majority of bookings that is the correct use of a Tuesday.

A contract is a fire door. You walk past it every working day of your life without a thought. The only morning it matters is the one nobody planned for.

So let us have that morning. A typhoon shuts Da Nang airport. Twenty of your travellers are already in the country, four nights of a programme no longer work, a resort has been paid for and cannot be reached, and your client is on the phone asking what you are going to do. None of that is unusual in September.

Everything below is that morning, walked through our own General Sales Conditions in the order you feel it. Not the order the lawyers wrote it in.

The first question is not the one you expect

Before anyone argues about a typhoon, there is a quieter question underneath it. Are we actually under contract at all?

This is the clause agencies most often have wrong. A quotation is not an offer you can accept into existence. Ours are explicitly indicative, subject to availability and to supplier rates at the moment of confirmation, and they hold for fourteen calendar days unless we have said otherwise in writing. After that the number is a historical document.

The binding contract forms when we issue the booking confirmation against a received deposit. That is the line in the sand. Before it you have a costed idea. After it you have an agreement with a cancellation ladder attached, and hotel allocation held against your name.

Paying the deposit is also the act that accepts the conditions. Worth knowing if the person who pays your invoices is not the person who read them.

Whose fault is the resort you cannot reach

A DMC contracts hotels, vehicles, guides and activity providers. It does not own any of them. That single fact shapes the entire liability section, and it is why the typhoon question splits in two.

Our conditions say we accept responsibility for choosing suppliers and for exercising reasonable skill and care in arranging the services. What we do not accept is liability for the acts and omissions of the independent suppliers themselves, except where the failure comes from our own negligence.

That sounds like an operator protecting itself, and it partly is. It is also the honest shape of the arrangement. Be suspicious of anyone who claims otherwise, because an operator promising to be liable for everything every supplier does has either not read its own document or has not priced what honouring it would cost.

So test the recovery behaviour instead. At two in the morning in Da Nang, the question that decides your client's week is who is awake, who has the general manager's mobile number, and who is paying for the alternative before anybody has established fault. Vetting a ground operator properly covers how to check that before you sign anything.

What a bad day is actually worth

If you read one clause, read this one.

Ours limits our total liability on any booking to the total amount you paid for the specific services that gave rise to the claim. It also excludes indirect and consequential losses, and it names them: lost profit, lost revenue, lost anticipated savings, reputational damage.

In plain terms, if a transfer fails, the exposure is measured against the transfer. Not against the value of the programme, and not against the client you lost afterwards. Most operator contracts worldwide are built this way, so a cap is not a red flag by itself. Knowing roughly where it sits is the point, because your own trade insurance is what covers the gap between that number and what you owe your client.

The insurance answer that sounds like a yes

Ask an operator whether it is insured and you will get a yes. That answer is nearly useless, because it never says insured for what.

Here is ours, stated plainly. We hold a tour operator travel accident policy underwritten by Chubb, providing personal accident cover for travellers on the programmes we operate. We send the insurer a traveller name list before each programme as standard, and the certificate and current schedule of benefits go out on written request within five business days.

Now the part most operators leave you to assume. It is an accident policy. It is not public liability insurance and it is not professional indemnity insurance. It does not respond to force majeure, to cancellation or curtailment, or to our own liability to you. On the Da Nang morning, it is not the document that pays for anything.

We publish that because a compliance file built on an assumption is worse than one built on a limitation you knew about. If your own trading conditions require a ground partner to carry public liability or professional indemnity, raise it in writing before the booking confirmation and we will confirm what is in force at that point, which today is the accident policy and no professional indemnity. We also recommend partners carry trade insurance appropriate to a wholesale operator, covering your own liability to travellers under your jurisdiction's law. That is the layer sitting above ours.

Where the money goes when nobody is to blame

Now the typhoon proper. Everybody has a force majeure clause and they all list the same events: natural disaster, epidemic, government action, war, civil unrest, strikes, infrastructure failure. The list is not where the meaning lives.

The meaning lives in what happens to money already spent. Ours says we will make reasonable efforts to offer an equivalent alternative or a postponement within twelve months, and that where we can recover costs from suppliers we return them to you proportionately. Then it says the thing operators prefer not to write down: we cannot guarantee recovery of supplier costs in those circumstances.

That is the sentence to look for in anybody's contract. A non refundable resort deposit paid in October does not become refundable because a storm arrived in September. An operator promising a guaranteed full refund under force majeure is promising something that depends on suppliers it does not control, which is exactly why the same clause recommends comprehensive travel insurance covering force majeure cancellation.

The clauses that never involve a typhoon

The dramatic ones get the attention. These are the ones that actually catch agencies, on ordinary weeks, with nothing on the news.

Numbers falling. Every quote is built on a headcount, and a vehicle or a guide does not get cheaper when four people drop out. Our conditions let us revise the per person price when confirmed numbers fall, treat a reduction of more than fifteen percent after deposit as a partial cancellation, and apply the full charge on the difference for reductions inside thirty days of the first service date. Tell an operator early about a wobbling group. The clause is far kinder at eight weeks than at three.

Postponement. Moving a confirmed programme needs written agreement, and ours are accommodated inside a twelve month window where suppliers allow it. If a postponement cannot be agreed in writing within fourteen days of the request, the booking is treated as cancelled and normal cancellation charges apply. That fourteen day fuse burns while everyone waits politely for a client to decide. The deposit and cancellation ladder itself is in how a DMC booking settles.

Data protection. Passport scans, dietary requirements, medical notes. All personal data, and both GDPR and Thailand's PDPA reach it. The surprise is that the agency is normally the data controller, so obtaining traveller consent to share their data with us and with downstream suppliers is your job. We process it only to deliver the booked services, pass it on only as far as delivery requires, hold completed booking data for a maximum of seven years for accounting and legal compliance, and help you answer access, erasure or rectification requests. If your privacy notice does not currently mention a ground operator in Thailand or Vietnam, look at that before the next group.

Errors. We can correct a genuine mistake even after a confirmation is issued. Where the error was a materially wrong price, you are told as soon as we find it and you can proceed at the corrected price or cancel without penalty. Where a hotel or guide has to be substituted for availability, we owe you equivalent or better quality, in writing.

Governing law. Ours is Thailand, with thirty days of good faith negotiation required before anybody starts proceedings, and the Thai courts after that. Check this in any operator's terms. A contract governed somewhere you would never realistically litigate is a practical limitation even when every other clause is fair.

Which document wins. A signed trade partnership agreement takes precedence over the general conditions wherever the two disagree, and the English version prevails over any translation. So anything you negotiated specifically belongs in the partnership agreement, not in an email. The entire agreement clause is what decides whether that email counts, and it usually decides that it does not.

Four things to find, in anybody's conditions

You are not going to read every operator's terms end to end and you do not need to. Find four things.

When the contract forms. Where the liability cap sits. What the insurance actually is, as opposed to whether it exists. And what force majeure says about money that has already gone out the door.

Those four decide almost every argument that ever happens, including the Da Nang one. Ours go to any partner who asks, before booking instead of after. If a ground operator will not send its conditions until you have paid a deposit, you have just learned the answer to a different question you were also asking.

Which is the thing about fire doors. Nobody chooses a building for them. You only ever find out whether somebody cut corners on the morning you need to walk through one.