Travel Agency Agreement (Pakistan)

A Travel Agency Agreement in Pakistan sets out the basis on which the supplier provides services to the client, defining deliverables, payment, intellectual property and liability.

The Contract Act 1872, enacted during the colonial period and still operative in Pakistan, provides that an agent is a person employed to do any act for another, or to represent another in dealings with third persons, and the person for whom such act is done is called the principal (Section 182). In the travel industry context, the travel agency acts as the agent of the client when booking flights and hotels from international carriers and hotel chains, but acts as a principal when selling packaged tours directly. This distinction is critical for determining liability under Section 230 of the Contract Act 1872, which provides that when an agent contracts with a third party in their own name without disclosing the principal, both the agent and the principal may be held liable.

Travel agencies operating in Pakistan are required to obtain a licence from the Pakistan Tourism Development Corporation (PTDC) under the Tourism Promotion Scheme, or from the relevant provincial Tourism Development Corporation — the Punjab Tourism for Culture, Heritage, Literature and Archives Department, the Sindh Tourism Development Corporation (STDC), or the Khyber Pakhtunkhwa Tourism Development Corporation (KPTDC). Unlicensed agencies operating without PTDC accreditation face penalties under provincial regulatory frameworks and may be reported to the Federal Investigation Agency (FIA) where fraud or misrepresentation is involved.

For Hajj and Umrah travel, the Ministry of Religious Affairs and Interfaith Harmony (MORAF) maintains a separate licensing regime under the Hajj Policy issued annually by the Government of Pakistan. Travel agencies offering Hajj packages must be approved by MORAF and are bound by the Hajj Policy's regulated pricing, package standards, and consumer protection guarantees. A Travel Agency Agreement for Hajj/Umrah services therefore operates alongside the MORAF approval terms.

International air ticketing in Pakistan is governed by the International Air Transport Association (IATA) Billing and Settlement Plan (BSP) administered through IATA's Lahore and Karachi offices. IATA-accredited travel agents in Pakistan are bound by IATA's Agent Debit Memo (ADM) procedures, which allow airlines to reclaim commissions or charge penalties for erroneous ticketing. These obligations must be reflected in the Travel Agency Agreement to confirm the agent can recover penalties from clients or sub-agents responsible for errors.

The Travel Agency Agreement in Pakistan must address foreign exchange compliance because international travel packages involve foreign currency payments to airlines, hotels, and tour operators. The Foreign Exchange Regulation Act 1947 and the State Bank of Pakistan (SBP) Foreign Exchange Manual govern the remittance of foreign exchange by Pakistani travel agencies for services rendered abroad. Travel agencies must hold a Money Services Provider (MSP) licence from SBP or work through an authorised foreign exchange dealer to remit funds to overseas principals.

A Travel Agency Agreement in Pakistan is needed whenever a travel company undertakes to provide services for a client or appoints a sub-agent to sell its packages, and the parties wish to establish clear obligations, pricing, cancellation terms, and liability before any payments are made.

A Travel Agency Agreement is required when a corporate client — a company, government department, or NGO — appoints a travel management company (TMC) to handle all official travel bookings. Corporate travel management contracts in Pakistan typically involve bulk ticket purchases, negotiated hotel rates, and visa facilitation for employees travelling to Gulf Cooperation Council (GCC) countries, the United Kingdom, and the United States, where visa rejections can cause significant financial and operational loss.

A Travel Agency Agreement is needed when a travel agent appoints a sub-agent or franchise outlet in another city — Lahore, Karachi, Islamabad, Peshawar, or Quetta — to sell packages on its behalf. The sub-agency agreement must specify commission rates, territory restrictions, and the sub-agent's authority to collect payments from clients, as well as the sub-agent's liability for client complaints and refund obligations under the Consumer Protection Acts of Punjab, Sindh, KPK, and Balochistan.

A Travel Agency Agreement is required when a tour operator organises group tours — school trips, corporate excursions, Hajj and Umrah packages, northern areas adventure tours, or international study tours — where multiple travellers pay in advance for a bundled service. The agreement must address what happens if minimum participant numbers are not met, if visas are refused, or if force majeure events such as natural disasters (particularly relevant given Pakistan's earthquake and flood risk) disrupt the tour.

A Travel Agency Agreement is needed when an overseas travel company appoints a Pakistani agent to recruit local customers for foreign holiday packages. Inbound and outbound tourism agreements of this nature require compliance with the SBP's foreign exchange remittance regulations and PTDC's registration requirements for inbound tour operators.

A Travel Agency Agreement is required for tourism ventures operating in Azad Jammu and Kashmir (AJK) or Gilgit-Baltistan (GB), which have separate tourism authorities — the AJK Tourism Department and the Gilgit-Baltistan Tourism Department — and where trekking and mountaineering operations require permits from the relevant district administrations and the Alpine Club of Pakistan.

A valid Travel Agency Agreement in Pakistan under the Contract Act 1872 and PTDC regulations must contain the following essential elements.

Party Identification and Licence Particulars: Full legal names and addresses of the travel agent and the client or sub-agent, the travel agent's PTDC licence number or provincial tourism authority registration number, and the IATA BSP accreditation number if the agent is IATA-accredited. The travel agent's National Tax Number (NTN) issued by the Federal Board of Revenue (FBR) must be stated, as travel services attract Sales Tax under the Sales Tax Act 1990.

Scope of Services: A precise description of the services to be provided — airline ticketing (domestic PIA, AirSial, Air Arabia Pakistan; international Emirates, Etihad, Qatar Airways, Turkish Airlines), hotel bookings, visa processing, ground transportation, travel insurance, tour guide arrangements, and any ancillary services. The agreement must specify whether the agent acts as principal or agent for each category of service, as this determines liability under the Contract Act 1872.

Pricing and Payment Terms: The total service fee, including the agent's commission or service charge, the ticketing fare, hotel rates, and visa fees. The payment schedule must specify amounts due at booking, at ticket issuance, and at departure. The agreement must state the currency — Pakistani Rupees (PKR) or foreign currency — and compliance with SBP foreign exchange regulations for international payments.

Cancellation and Refund Policy: Clear terms on cancellation charges at each stage — for example, PKR 2,000 per ticket for cancellations 72 hours before departure, airline-imposed cancellation fees passed on to the client, non-refundable visa fees, and hotel no-show charges. The refund timeline must comply with the Consumer Protection Acts of the relevant province, which typically require refunds within 30 days of cancellation.

Visa and Documentation Obligations: The agent's obligation to collect correct documentation from the client for visa applications, the disclaimer that visa decisions rest with the foreign embassy and are outside the agent's control, and the client's obligation to provide accurate information under Section 17 of the Contract Act 1872 (misrepresentation renders contracts voidable).

Force Majeure Clause: Pakistan's travel industry faces specific force majeure risks — civil unrest, terrorism (covered by the Anti-Terrorism Act 1997), natural disasters (Pakistan is prone to earthquakes under the Seismic Zones map of the Pakistan Meteorological Department, and floods along the Indus River System), and international travel advisories issued by the Ministry of Foreign Affairs. The force majeure clause must define what events discharge the parties' obligations.

Liability Limitations: The agreement should specify the maximum liability of the travel agent — typically limited to the service fee paid rather than consequential losses such as lost business opportunities or emotional distress. Consumer Protection Acts in Punjab and Sindh impose minimum standards for remedies that cannot be excluded.

Dispute Resolution: Disputes under Pakistan's Contract Act 1872 may be referred to arbitration under the Arbitration Act 1940 (still in force for domestic arbitration, as Pakistan has not yet enacted a new arbitration statute) or to the Consumer Courts established under provincial consumer protection laws. Specification of the governing court — Civil Court or Consumer Court in Lahore, Karachi, or Islamabad — is essential.

Forms-legal.com provides this Travel Agency Agreement (Pakistan) template to assist travel businesses and clients in documenting their arrangements clearly. The template reflects the requirements of the Contract Act 1872, IATA BSP obligations, and provincial Consumer Protection Acts. Parties should obtain advice from an advocate enrolled at a provincial Bar Council before executing agreements involving substantial sums or overseas principals.

Under the Companies Act 2017, the Securities and Exchange Commission of Pakistan (SECP) maintains the register of Pakistani companies. Section 16 of the Companies Act 2017 governs company incorporation. The Contract Act 1872 governs general contractual obligations. The Federal Board of Revenue (FBR) administers corporate tax under the Income Tax Ordinance 2001. The High Courts (Lahore, Sindh, Peshawar, Balochistan, Islamabad) have original and appellate jurisdiction.