IRONY ALERT: American Airlines Argues Company Can’t Limit Its Own Liability. Loses in Court.

No matter what happens, how badly American AAdvantage screws up, you really can’t sue them. That’s because under Northwest v. Ginsberg you can only sue a frequent flyer program for actually violating its own terms and conditions. American’s terms even explicitly state,

these Terms and Conditions disclaim any duty of good faith and fair dealing as well as any implied contractual terms or obligations.

So there you have it. They have no liability for a breach of any duty of good faith and fair dealing. With a bit of schadenfreude, then, I note that American Airlines lost its $2 million lawsuit against Century Link because of the latter’s terms and conditions disclaiming liability for anything other than willful misconduct. (HT: Scott K.)

Here are the 31 greatest moments of irony. American’s lawsuit is number 32.

Because Century Link’s predecessor Qwest Communications had inaccurate maps, in 2009 they signed off on construction digging through cable in a parking lot beside the US Airways data center in Tempe. US Airways was down for four hours. But because the Qwest terms and conditions disclaimed liability, courts have held them responsible only for the $586 in services that weren’t provided during the outage.

American Airlines was arguing a company “cannot legally limit its own liability” under Arizona law. Which is pretty funny when you think about it.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. I’m not sure what’s the right legal term in English (it’s an “un-negotiable contract” loosely translated), or if it’s applicable in the U.S, but here in Israel a contract between a company and a consumer isn’t bounding on some terms if the contract contains disproportionally unfair terms. It’s different when the contract is signed between two companies as the assumption is that a company, unlike a consumer, would get a legal advice and will negotiate the contract before signing.

  2. @Lior – ‘adhesion contract’ — and these are somewhat complicated generally but US courts pretty much allow airlines to use them with impunity, subject to regulation by the Department of Transportation.

  3. The test for “unconscionability”. Requires both substantive and procedural unconscionability (in California) and is easier to prove in a consumer vs business adhesion contract. This agreement was between two businesses so far chance.

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