American Airlines Inc v Georgeopoulos [No 2]

American Airlines Inc and Mr Georgeopoulos were parties to litigation concerning an alleged breach of contract. The dispute came before the New South Wales Court of Appeal.

The primary legal issue before the Court of Appeal was whether the trial judge had erred in finding that American Airlines had breached its contract with Mr Georgeopoulos by failing to provide him with a business class seat on a flight from Sydney to Los Angeles, despite his having paid for one. This involved a consideration of the terms of the contract of carriage and the circumstances under which a failure to provide a specific class of service could constitute a breach.

The Court of Appeal upheld the trial judge's finding of breach. It reasoned that the contract of carriage obligated American Airlines to provide the service for which Mr Georgeopoulos had paid, namely a business class seat. The fact that he was accommodated in a different class of service, even if it was of comparable or superior comfort, did not negate the breach of the specific contractual term. The Court applied the principle that a party is entitled to receive the benefit of the bargain they have struck, and a failure to do so constitutes a breach of contract, irrespective of whether the alternative provided was objectively adequate.

The Court of Appeal dismissed the appeal, affirming the trial judge's decision.