Regarding "It's an interesting sleight of hand created by contract, isn't it?", what's unusual or unfair about this? How does this differ from typical agent indemnification of principal (which doesn't even require contract) or a typical insurance contract? Continental is liable to the full extent, but will be indemnified to the extent that the indemnifier is liable or solvent; beyond that Continental can be made to pay; and Continental pays the price in terms of loss of reputation. Except for a lack of consumer transparency at the outset, what's the problem? 
 
Murray Levin
 
Murray S. Levin
Professor
University of Kansas
School of Business
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785-864-7506
913-262-2688


________________________________

From: Academy of Legal Studies in Business (ALSB) Talk on behalf of Terence Lau
Sent: Wed 5/26/2010 8:16 AM
To: [log in to unmask]
Subject: Re: Frontline



I watched the documentary when it came out.  What happened on that flight
was totally preventable, and did not need to happen.  There was a specific
section of the documentary that discussed issues of liability and
indemnification between Colgan and Continental, discussed here:
http://www.pbs.org/wgbh/pages/frontline/flyingcheap/safety/codeshare.html

As you might expect, Colgan is indemnifying Continental for all losses
caused by Colgan, so Continental is off the hook in spite of the product
bearing Continental's brand name in all aspects.  It's an interesting
sleight of hand created by contract, isn't it?  While I have no doubt it's
enforceable and legal, it really leaves consumers in the dark, especially
since more than 60% of Continental flights are now operated by third-party
arms-length entities like Colgan.



This documentary centered on a recent air disaster of a Colgan commuter
plane
that was aligned with Continental.  You might remember the loss of life as
the
flight into Buffalo crashed a few miles from the airport.

The FAA hearing concluded that pilot error was the cause of the crash.
Tickets
were purchased at a Continental counter, the planes were painted in
Continental
colors, the travelers (or most of them) probably thought they were in
Continental
hands, and so forth.  Plaintiffs were met with contractual firewall that
stymied their
efforts at recovery.

I got the idea that the documentary was of recent origin, but there was no
report on
litigation.  Surely there's something cooking out there.  Anyone picked up
on some
good articles, or maybe written about it?

Centuries ago, there was a case against Texaco for the negligent repair of
an auto
by one of their independent dealers.  Plaintiff claimed that the motto,
"You can trust
your car to the man who wears the star," was one that inclined a person to
trade
there, and that Texaco should be held for the dealer's negligence.  Anyone
remember
that, or how it came out?