Pan American World Airways, Inc. v.

Rapadas
19 May 1992
Conflict Rules in Contracts of Adhesion

Facts:
1. Respondent, Jose Rapadas held a passenger ticket and baggage claim check for his Guam to
Manila Flight.
a. Page 2 of the airline ticket provides that the Warsaw Convention shall govern in case
of death or injury of the passenger or loss, damage, or destruction to his luggage
b. The notice states that

If the passenger's journey involves an ultimate destination or stop in a country other

than the country of departure (essentially, outside the country of origin = international
flight) the Warsaw Convention may be applicable and the Convention governs and in
most cases limits the liability of carriers for death or personal injury and in respect of
loss of or damage to baggage.

2. While in line to board the flight, Rapadas was informed by airport staff that he would need
to check-in his Samsonite attache case. He checked-in the bag, without declaring the
contents of value and registering, and was given a claim tag.
3. Upon arriving in Manila, he was unable get the attache case since it went missing.
a. Rapadas wrote a letter to the petitioner and filed the necessary forms. He sent letters
demanding and reminding the petitioner of his claim
b. Rapadas received a letter from PANAM offering to settle the loss of the case for
USD 160. The amount represented the limit of liability for the loss or damage to
personal property under the contract of carriage. Rapadas refused and filed a case for
damages.
4. Lower Court: Ruled in favor of Rapadas. There was no stipulation providing notice on the
limitation of liability.
5. CA: Affirmed the lower court.

Issue: Whether the Warsaw Convention on Air Transporation shall apply in the claim of loss of
baggage occurring for international flights

Held: Yes, it will apply.

Ratio:
1. A plane ticket is considered as a contract of adhesion where one party imposes a ready-made
contract on the other. These contracts are not prohibited but as a rule, is construed strictly
against the party issuing the same.
2. Parties may still be bound by the contract as they are free to reject its terms and conditions.
The courts do not encourage blind reliance on such contracts.
3. The Court found that the provisions of the plane ticket govern the limitations of liabilities of
the airline in case of loss. The passenger has the duty to be vigilant in handling his baggage –
to register the baggage properly.