Brand Rights and Hotel Management Agreements: Lessons from Ritz-Carlton Bali’s Lawsuit against the Ritz-Carlton Hotel Company
Loading...
No Access Until
Permanent Link(s)
Collections
Other Titles
Abstract
In this article, the authors consider the managerial implications of a recent lawsuit, P. T. Karang Mas Sejahtera v. The Ritz-Carlton Hotel Company, LLC, in which a jury found for the plaintiff, the owner of the Ritz-Carlton Bali Resort and Spa, against the defendant, The Ritz-Carlton Hotel Company, LLC. Ritz-Carlton’s parent company, Marriott International, had previously formed a partnership with Bulgari S.p.A., the Italian luxury jewelry and accessories firm, to create Bulgari Hotels and Resorts, a new ultraexclusive line of luxury hotels. The first two Bulgari properties opened in Milan and Bali. Soon after the Bali project was announced, P. T. Karang Mas Sejahtera (KMS) sued Ritz-Carlton for breach of agreement. The authors show that this and other recent court decisions situate hotel management agreements squarely under agency law. Within the framework of agency law, an agent owes specific fiduciary duties to a principal that supersede contractual terms and a principal has a nearly absolute right to terminate such a agreement. In the Bali case, the violated duties included a duty not to compete with or assist the competitors of a property being managed under agreements within that property’s competitive market set. The authors argue that, as a consequence of these legal decisions, issues pertaining to brand rights and management agreements have been clarified. In this article, the authors outline these brand rights issues, review these precedent-setting legal cases, explain why Ritz-Carlton lost the suit to KMS, and draw several lessons pertaining to hotel management.
Journal / Series
Volume & Issue
Description
Sponsorship
Date Issued
2010-05-01
Publisher
Keywords
brand rights; hotel management agreements; hotel brand licensing; hotel litigation; international hotels; Marriott; Ritz-Carlton; Bugari; Bali
Location
Effective Date
Expiration Date
Sector
Employer
Union
Union Local
NAICS
Number of Workers
Committee Chair
Committee Co-Chair
Committee Member
Degree Discipline
Degree Name
Degree Level
Related Version
Related DOI
Related To
Related Part
Based on Related Item
Has Other Format(s)
Part of Related Item
Related To
Related Publication(s)
Link(s) to Related Publication(s)
References
Link(s) to Reference(s)
Previously Published As
Government Document
ISBN
ISMN
ISSN
Other Identifiers
Rights
Required Publisher Statement: © Cornell University. Reprinted with permission. All rights reserved.
Rights URI
Types
article