The new Hostelworld contract in Plain English

Several people have asked for clarification on some of the terms in the new HW contract. It is important to understand what we are being asked to sign, so here is a summary of the contract in Plain English.

This summary is purely intended to make it easier to understand the contract, not to replace it. It is based on the contract issued in May, 2013.

I am not a lawyer. If I have misinterpreted anything, please let me know so that this summary can be corrected.

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HOSTELWORLD STANDARD SERVICES AND LICENCE AGREEMENT

This agreement is between Hostelworld (HW) and the owner of the Hostel. HW is a company incorporated under the laws of Ireland with registered number 337103 and its registered office is at Charlemont Exchange, Charlemont Street, Dublin 2. Under this agreement, HW agrees to provide marketing, information technology and data processing services to the Hostel and to promote beds in the Hostel on Hostelworld.com and the other Websites for customers to book.

The contract starts when HW tells the Hostels that HW has received and approved the Hostel’s application to work together.

KEY DETAILS
Name of the Property
Address of the Property
Type of Property (ex. Hostel, Hotel, etc.)
Total number of Bedrooms in the Hostel
Total Bed capacity in the Hostel
*HW Deposit – The percentage of the total price of the stay that the Customer pays to HW when making a booking (ex. 10%)
*HW Service Fee – The percentage of the total price of the stay that the Hostel owes to HW for each booking in exchange for HW’s services (ex. 10%)
[*Note: See the Definitions below, Section 4, and Appendix 1 for clarification on how these two fees are different and how they relate to one another]
Date when the terms of this contract take effect
Full name of the person signing the contract for the Hostel
Email
Email to use for future correspondence regarding contracts
Date the contract is signed

DEFINITIONS
"Agreement" means this contract, including the "Key Details" section and all appendices.

"Available Beds" means the Hostel’s maximum total bed capacity (before any beds are sold to anyone) on any night that the hostel is open for business.

"BackpackOnline" means the online property management system (PMS) provided by HW to the Hostel to support the management and administration of the Hostel, including availability, rates and reservation management, inventory management and other reporting requirements.

"Bedrooms" means the total number of bedrooms in the Hostel that are available for a customer to rent. (For clarification, a property with a single bed room, a double bed room and a 12 bed dormitory would have 3 bedrooms).

"Beds" means the beds, plus any additional products and services that are not optional and that are included in the price of the beds (some examples of additional products and services are breakfast, airport pick-ups and internet access if they are included in the price of the bed).

"Booking Price" means the total price that the Hostel quotes on Hostelworld.com and their affiliate websites for a person to stay at the Hostel for a night, including the price of any additional products and services that are not optional.

"Deposit" means the amount that HW collects from Customers on the Hostel’s behalf according to the terms in Appendix 1.

"Force Majeure Event" means any event that prevents either HW or the Hostel from being able to meet the obligations in this contract, provided that the event is beyond their control. This does not include events that could have been avoided by taking reasonable precautions or events that were deliberately caused by HW or the Hostel.

"HW Booking Engine" means HW's own technology that HW allows the Hostel use on the Hostel’s own website(s) to let customers check availability and prices and make online reservations.

"Inbox" means the extranet facility provided by HW to the Hostel’s staff for the management of their property information, bed / room availability and rates that are in turn published on HW websites. In addition, it provides access to all reservation details and related reporting from HW. It includes all variants of this system that may be used by a Hostel, including HW Inbox, WRI Inbox and Groups Inbox.

"Licensee" shall mean the individual, business or corporate entity which owns the Hostel.

"Login" means the account login given to a Hostel owner to enable it to set up an account with and accept bookings from HW via a Website.

"PPP" means HW's Preferred Partner Programme which allows HW to market Hostels as having preferred partner status via Hostelworld.com through its Hostelworld Recommends Programme (HRP).

"Property Information" has the meaning given in section 2.1.

"Service Fee" means the fee that the Hostel pays to HW for marketing, IT and data processing services (described more clearly in section 4.1).

"Term" means how long this contract is valid, as specified in section 8.1.

"Travel Services" means the Bed and all other travel services that the Hostel will provide to the Customer as described in this Agreement.

"Websites" means Hostelworld.com and any other websites or tools that use HW's technology to process online reservations. (In this summary, “Websites” will usually be referred to simply as “HW”)

"Working Days" means any day except Saturday, Sunday or an official holiday in the UK or Ireland.

1. THE HOSTEL’S OBLIGATIONS

1.1 HW only wants to be associated with high-quality Hostels that provide value-for-money products and services, and that operate their business in a way that makes HW look good. The Hostel is aware that Customers booking through HW are entitled to expect good service from the Hostel, so the Hostel agrees that it will:

1.1.1 honor all bookings made through HW, even during special event periods;

1.1.2. ensure that all Customers are treated equally (in particular with regard to gender, race, religion, disability and sexual orientation) both at the time of bookings and during the Customer's stay at the Hostel;

1.1.3. respond in a timely manner to any and all questions from HW and/or Customers;

1.1.4. ensure that HW has the lowest Booking Price that is available anywhere else online, including on the Hostel’s own website (for the same room type, same facilities, same dates, same bed type, same number of guests and same terms for "ancillary products" such as breakfast). If HW finds out that it is possible to book a Bed somewhere else at a cheaper price than on HW, the Hostel has to: (i) immediately arrange to offer that lower price on HW, (ii) charge all Customers who have not yet arrived at the Hostel the lower price on arrival and (iii) refund the difference in price to all past Customers who bring it up with HW (the difference between the price that was advertised on HW and the lower price that was available at that time through some other channel);

1.1.5. give HW "availability parity" for Beds, meaning that any beds that are available to sell through any other channel (even the Hostel’s own website) must also be available to sell on HW; and

1.1.6. always allow HW to sell the Hostel’s complete available bed capacity, (meaning each and every bed that is available anywhere online, including the Hostel’s own website) and always on a real-time basis (i.e. first come first served) until the last bed in the Hostel is sold.

1.2. If the Hostel cannot honor a Customer booking, the Hostel hast to:

1.2.1. find and provide an equivalent bed for the Customer for the night(s) they booked (equivalent in terms of price, location and facilities) and, if this is not possible, find and provide a superior bed in the relevant location and pay to the Customer the difference in price for that bed for the duration of their booking; and

1.2.2. refund the Deposit to the Customer.

1.3. The Hostel confirms that it has and will attempt to keep all licenses, permissions, permits and approvals required to legally provide accommodation to Customers at the Hostel (including all health and safety requirements).

1.4. The Hostel confirms that it has and will attempt to maintain an insurance policy to cover:

1.4.1. any risks involved with operating the Hostel. This should include anything that a hostel would normally get insurance for. For example, (i) occupier's liability, (ii) public liability insurance and (iii) all other risks that it would be reasonable to insure against. (Other risks including things like death, personal injury and illness of the Customers or anyone the Hostel hires if they suffer as a result of activities in the Hostel) This insurance should also cover all legal costs of both the Customers involved and of the Hostel; and

1.4.2. the total amount of money that the Hostel could reasonably expect to have to pay as a result of loss, damage, injury, or other risks involved with operating a Hostel.

1.5. The Hostel will make sure that the insurance policy mentioned in section 1.4 is up to date, covers everything that it should, and that it is always at the level that any good accommodation provider’s insurance should be.

1.6. If HW asks to see the insurance policy mentioned in section 1.4 the Hostel will prove that the policy exists and is up to date.

1.7. The Hostel promises to keep all credit card information that they get from HW confidential, store it safely according to PCI security standards, and only use the credit card information to charge for authorized cancellations. If the credit card is charged without the customer’s authorization and the Hostel is identified as the one who made the charges or allowed the charges to be made by someone else, then the Hostel (and not HW) are responsible for paying all of the costs that would be associated with a credit card fraud claim. (including refunds, fines, and legal costs)

1.8. The Hostel confirms that the person who signs this contract is authorized to sign for the Hostel.

1.9. Regarding software provided by HW, such as Inbox or Backpack Online, the Hostel will keep its (Manager) Logins confidential and will only let authorized people use them to log in.

1.10. The Hostel is responsible for anything that is done under the Login, whether it was done by an authorized person or not.

2. PROPERTY INFORMATION AND MARKETING

2.1. The Hostel will provide the property information that is listed about the Hostel on HW. This information includes a description of the Hostel, its facilities, amenities and location, photos, details of the Beds and services available to Customers, the price of the Beds and services, and details of any taxes that the Customer will be required to pay. The Hostel will give this information to HW in whichever format HW needs.

2.2. HW can use any part of the Property Information given by the Hostel on HW’s website or any affiliate website for as long as the contract is valid. HW does not have to pay the Hostel anything to use this information.

2.3. The Hostel has to tell HW if there are any additional local or value added taxes that the Customer has to pay. The Hostel has to make these taxes clear in the Property Information. The Hostel cannot charge any additional taxes to the Customer that are not specifically listed in the Property Information.

2.4. The Hostel cannot put any of the following in their Property Information: (a) its telephone number, fax number, email address, Skype ID, or social media page references, (b) a link to its website, (c) direct references to the Hostel’s website or anyone else’s website or (d) any other means by which a Customer could directly contact the Hostel. HW reserves the right to remove or edit any of the Property Information that it considers to be incorrect, inappropriate or incomplete.

2.5. The Hostel confirms all of the following: (i) the Property Information is owned by the Hostel (except in the case described in section 2.6); and (ii) the Property Information always has to be true, accurate and not misleading. If any of the Property Information ever becomes untrue, inaccurate or misleading, the Hostel has to tell HW in writing (email is okay) within 24 hours. If HW has to pay any money because a customer complains that the Property Information is not correct, then the Hostel has to pay that money to HW as well as any other expenses involved with the complaint.

2.6. If HW pays to translate the Hostel’s Property Information into another language, then the translation belongs to HW and not to the Hostel.

2.7. Any information that HW collects about a customer when they make a booking belongs to HW. This information is only given the Hostel in order to fulfill the booking. The Hostel cannot use this information to market to that customer.

2.8. HW and its affiliates can use the Hostel’s name for online marketing purposes as long as the contract is valid. This includes email marketing and pay-per-click advertising (buying keywords) at HW’s own cost.

3. HW'S OBLIGATIONS

3.1. HW will provide marketing, IT and data processing services to the Hostel so that Customers can book the Hostel’s products or services online.

3.2. HW will promote the Beds on hostelworld.com and through its network of affiliates. It may also promote the Beds on some or all of its other Websites. HW will list properties (including the Hostel) in any order it wants. HW can display Customer search results in any order it wants and based on any ranking system it wants.

4. HW'S SERVICE FEES

4.1. The Hostel will pay a Service Fee to HW for providing the services listed in section 3.1. The amount of the Service Fee will be determined by a percentage of the total price of the Customer’s stay. The exact percentage owed by the Hostel can be found in the Key Details section at the beginning of the contract. The Service Fee is owed to HW regardless of whether the Customer shows up, cancels, or no-shows. [See Appendix 1 at the end of the contract for details on what happens when the Service Fee is different than the Deposit]

4.2. The Hostel has to make sure that HW can keep the entire amount of the Service Fee. If a law requires taxes to be paid on that money, then the Hostel will pay HW additional money so that HW still keeps the total amount that it was owed for the Service Fee (as if there were no taxes). The Hostel cannot reclaim any money from HW for taxes paid on the Service Fee or for any other payments due to HW at any time.

5. COLLECTIONS AND SETTLEMENT

5.1. HW will collect a Deposit for each Customer who makes a booking through HW (not as their own fee, but rather on the Hostel’s behalf). HW will collect this money at the time the booking is made by online debit, credit card, or other online payment method. The Deposit will be a percentage of the total price for all nights of the Customer’s stay. The exact percentage that will be collected as the Deposit can be found in the Key Details section at the beginning of the contract. HW will hold the Deposit for the Hostel, and keep the money or pay it to the Hostel depending on which situation applies from Appendix 1 at the end of this contract.

5.2. The Hostel is responsible for collecting the remaining balance due from the Customer. The amount collected will be the Booking Price for each night minus the deposit that they have already paid through HW. The Hostel cannot collect the money until the Customer has arrived at the hostel, unless this has been stated in the Property Information. HW will provide the Customer’s credit card details through the extranet, Inbox, or Backpack Online. Credit card details will be given to the Hostel so that (a) the full balance can be charged if the Customer arrives, or (b) the Cancellation Fee described in section 5.3 can be charged if the Customer does not arrive. The Cancellation Fee can be charged according to HW’s customer terms and conditions, which can be found on HW.

5.3. If the Customer No-Shows, the Hostel can charge a cancellation fee. This fee can be equal to or less than the remaining balance due for the first night’s stay (not including the Deposit) unless a different cancellation fee has been clearly stated to the Customer before they booked. It is the Hostel’s responsibility to collect the cancellation fee.

5.4. The Hostel is responsible for (i) updating and maintaining the pricing for its beds through Inbox, BackpackOnline or other connectivity approved by HW and (ii) any mistakes made while entering the pricing. This responsibility includes making sure that the correct pricing and availability is displayed for special event periods. If the Hostel puts the wrong prices or availability, it is responsible for the error.

5.5. HW can charge the Customer a booking fee or other processing fee when the Customer makes a booking. The amount of this fee will be determined by HW. This fee is HW’s money, even if it is charged in the same transaction as the Deposit. The Deposit, on the other hand, is technically the Hostel’s money that HW is collecting and holding on the Hostel’s behalf.

5.6. If this contract expires or is terminated, the Hostel still has to pay the Service Fees for all Customer bookings that were made while the contract was valid.

6. RESPONSIBILITY AND LIABILITY

6.1. The Hostel gives HW the authority to make bookings with Customers on behalf of the Hostel. HW has no responsibility to the Customer beyond making the booking. A booking creates an agreement between the Customer and the Hostel. If HW has any losses, costs, or damages because a Customer files a claim about their booking at the Hostel, then the Hostel has to pay HW for those costs (unless the loss, cost, or damage is HW’s fault due to negligence, fraud, or misrepresentation).

6.2. The Hostel and HW both agree that HW will have no legal obligation to the Hostel (or any other person who has rights under this Agreement) for any of the following types of loss or damage that could be connected with this Agreement: (i) loss of data, income, profit, business or opportunity, (ii) damages, losses and costs that relate to third party claims and (iii) indirect, special and consequential loss or damage. (This is conditional upon clause 6.5)

For reference:
Tort: an action, or act of negligence, which causes someone to suffer loss or damage
Misrepresentation: a false statement of fact intended to entice someone into entering into an agreement (for example, lying about a product or service in order to sell it or to get someone to sign a contract)
Breach of Duty: the failure of one person to ensure that someone else does not suffer unreasonable loss or damage (or exposing someone else to a risk of loss or damage)

6.3. The maximum legal obligation that HW has to the Hostel, regarding any claims of loss that result from this Agreement, is limited to €5,000.

6.4. It is agreed to describe the relationship between the Hostel and HW to the Customer like this: 1) HW is just an agent, and the Customer is contracting with the Hostel (not HW) to provide beds. 2) The Deposit that the Customer pays when they make the booking is collected by HW on behalf of the Hostel. 3) The final price that the Customer pays to the Hostel will be reduced by the amount of the Deposit.

6.5. It is agreed that nothing in the contract will limit or exclude the legal responsibility of either the Hostel or HW for (i) the fraud or misrepresentation of themselves, or (ii) death or injury caused by the negligence of either the Hostel or HW.

6.6. The Hostel agrees that if HW uses the Property Information provided by the Hostel and someone else files a claim against them, then HW is not at fault and cannot be blamed.

6.7. Any marketing, IT, data processing services, data, reports, or other information that HW might provide are given as they are, with any mistakes or errors that may be present. HW does not promise the accuracy of this information or guarantee its quality.

6.8. If there is a Force Majeure Event, neither the Hostel nor HW are legally responsible for their failure to perform the services described in this contract.

6.9. If the Hostel operates Website(s) that incorporate a HW Booking Engine, the Hostel;

6.9.1. will tell HW in writing (email is okay) about all of the websites, with their domain names or web addresses, before using the HW Booking Engine on those websites;

6.9.2. will be entitled to receive money back for the bookings that are made on that Website(s) only on the basis and in the amounts specified in Section 11 of this contract. [Editor’s Note: no amounts are specified in Section 11 of the contract that this summary is based on] The Hostel is not entitled to receive any other payment of any kind back from HW. (See Section 6.10 below for an explanation of when the Hostel would not receive money back for bookings made through the HW Booking Engine);

6.9.3. must check the terms in Section 11 before signing this Agreement and tell HW if the terms (including the rebate percentage and the booking fee amount) are not correct or are different from the arrangement that the Hostel already has with HW; and

6.9.4. agrees that the Hostel will sign a new version of this contract if the Hostel and HW agree on a different rebate percentage and/or booking fee for bookings made through the HW Booking Engine.

6.10. If the Hostel uses the HW Booking Engine on any website without telling HW first, as required in Section 6.9.1 the Hostel will not be entitled to receive any money back from HW for the bookings from that website. The Hostel will also be considered to have violated the terms of this contract.

7. RESTRICTED NATIONS

The Hostel confirms that it is not a national or controlled by a national of Cuba, Iran, Syria, Sudan, or North Korea (each a "Restricted Nation") and that the Hostel’s services are not located in a Restricted Nation. HW reserves the right to add or remove countries from the list of Restricted Nations from time to time with written notice to the Hostel. HW can immediately terminate this contract if the Hostel is in violation of this term.

8. TERM AND TERMINATION OF THE AGREEMENT

8.1. This contract is valid from the time is starts (as defined at the beginning of the contract) and will continue to be valid for as long as the Login is used and/or Beds at the Hostel are available to book on HW. The contract will remain valid unless one of the parties chooses to terminate it according to the terms in the contract.

8.2. Either party can terminate this contract by giving a minimum of 28 days' notice, as outlined in Section 9.1.

8.3. Both the Hostel and HW are entitled to terminate this contract immediately upon giving notice to the other party if: (i) the other party has violated the terms of this contract, and in the case were the violation can be fixed, that party has not fixed the problem within 14 days of being notified of it; (ii) the other party stops conducting business or stops paying the money it owes or (iii) someone else (such as a liquidator) legally takes control of that party’s assets, or (iv) the other party has suffered a Force Majeure Event which has prevented it from performing any of the terms of this contract for more than 7 days.

8.4. HW can also choose to terminate this contract immediately (with written notice) if:

8.4.1. the Hostel’s average rating on any of the Websites ever falls below 60%;

8.4.2. the Hostel advertises in any way that HW thinks will mislead Customers or deceive Customers about the price they will pay or any other advantage they will enjoy (ie. if HW thinks the Hostel is running a Bait-and-Switch scam by promising the Customer something that they will not actually receive);

8.4.3. HW thinks the Hostel’s behavior (or being associated with the Hostel) will hurt HW’s reputation;

8.4.4. HW believes that the Hostel is writing or paying for "fake" customer reviews or accessing Customer accounts to change reviews; or

8.4.5. the Hostel violates the terms of Section 1.

8.5. If this contract expires or is terminated for any reason, the Hostel still has to honor all reservations that were made while the contract was valid according to the terms in this contract.

8.6. When this contract terminates, the Hostel has to stop using all software, technology and services previously provided by HW.

9. GENERAL

9.1. Any notice from the Hostel or from HW regarding this contract has to be in writing and must be sent:

9.1.1. (if from the Hostel to HW) to [email protected]; and

9.1.2. (if from HW to the Hostel) to the email address specified by the Hostel as the email address for future contract related correspondence (listed in the Key Details section above), and, in each case, the written notice will be considered to have been served when it was sent (not when it was opened or read)

9.2. HW can change any terms in this contract at any time by giving 14 day’s notice to the Hostel. If the Hostel doesn’t agree to the changes it can terminate the agreement by giving at least 3 Working Days notice, as long as those 3 days don’t go beyond the 14th day of HW’s notice period. (This termination option overrides the terms of Section 8.2) That said, HW might accept less than 3 Working Day’s notice in some cases, but both HW and the Hostel have to agree to this in writing. No changes to this agreement will go into effect unless they are in writing and signed by both the Hostel and HW.

9.3. The Hostel and HW are both responsible for complying with data protection and privacy laws relating to their respective activities. The Hostel agrees to protect all personal data about Customers, to comply with data protection laws, and to avoid doing anything that would result in HW being in violation of data protection laws (especially letting anyone have access to a Customer’s credit card details unless it is necessary to make an authorized payment or if it required by law). (Nothing here changes anything from Section 2.7)

9.4. The Hostel agrees in advance that HW can transfer all of its rights and obligations in this contract to (i) someone who buys HW’s business (or the part of HW’s business that pertains to this contract), or (ii) any subsidiary group or sister company of HW (the "Transferee").

9.5. As soon as the Hostel is notified of the identity and contact details of a Transferee, the Hostel will treat the Transferee as (i) the one responsible for all of HW’s obligations to the Hostel, and (ii) the one who will receive all of HW’s rights as they are described in this contract.

9.6. If HW requests it, the Hostel will sign any documents (including a Novation Agreement, which says that the Hostel agrees to transfer all of the terms in this contract from HW to the Transferee) in order to prove that a transfer like the one described in Section 9.4 did take place. HW will make sure that the Transferee also signs any documents that are required. (Nothing here changes anything from Section 9.5)

9.7. This contract, including the Key Details section and all appendices, is the entire agreement between HW and the Hostel. It replaces any previous contracts or arrangements that cover the same subject matter, except for these: (i) the Backpack Online terms and conditions, (ii) the PPP terms and conditions, (iii) any terms and conditions governing featured listings on HW-operated Websites and any other written terms and conditions that HW may introduce in the future. It is HW’s opinion that none of the terms and conditions just mentioned in (i) to (iii) of this section cover the same subject matter as this contract, but if there is ever a conflict between the terms and conditions in this contract and the ones in (i) to (iii) then this contract will win.

9.8. This contract is personal to the owner of the Hostel, and cannot be transferred to anyone else without receiving HW’s written permission first. The Hostel agrees to tell HW in advance if it plans to transfer ownership of the Hostel to someone else. Nothing in this contract means that HW and the Hostel are partners or in a joint venture.

9.9. The original English language version of this contract may have been translated into other languages. The non-English version is just a courtesy, and all of the rights and obligations of both parties will be determined by the English version. If there is ever a dispute about the contents or interpretation of this contract, if anything is conflicting, unclear, or inconsistent, or if there is a difference between the English version and any other language version, then the English language version will be considered the correct one. The English version will be used in all legal proceedings.

9.10. This contract will be controlled and interpreted by the laws of Ireland, and both HW and the Hostel agree that this contract falls under the legal authority of the Irish courts.

Some Hostels connect to HW’s IT system and benefit from HW’s marketing, IT, and data management services through an API that lets them use their own Property Management System or another company’s Property Management System. Other Hostels incorporate HW’s Booking Engine into their own website. The following Sections (10 and 11) only apply to those Hostels that use the HW technology in one of these ways.

10. API LICENSEES

This section only pertains to the Hostels that connect to HW's IT system through an API.

10.1. HW has the right to suspend the API connection whenever it wants to if the connection causes: (a) the HW system to suffer technical problems, or (b) the HW system to become overloaded, or (c) the HW system's processing or response times to significantly increase. HW values all the Hostels who connect through the API and will not take such action lightly or without trying to notify any Hostels who might be suspended as a result of this action. Ideally the Hostels will be notified in advance, but the notification could also come during or after the suspension of services. Also, HW will try to minimize the amount of time that the API is suspended and to work with the Hostels to reduce the impact of the suspension on the Hostel’s business.

10.2. The Hostel is responsible for making sure that the API provider is able to give HW information on the Hostel’s Bed/Room availability and the availability that is given to HW for past and future dates.

11. BOOKING ENGINE LICENSEES

This section only pertains to the Hostels that operate Websites that incorporate the HW Booking Engine.

11.1 The Hostel agrees that since HW has intellectual property in the “confirmation of booking” page of the Hostel’s website, it also has rights to this page. HW can require its own branding (or any other content it finds appropriate) to appear on this page.

11.2 The Hostel has a license to use HW’s technology that supports the HW Booking Engine in all of the Hostel’s websites listed in the table in Section 11.4. [Editor’s note, there is no table and there is no Section 11.4 in the contract that this summary is based on] The license is personal to the Hostel owner and cannot be transferred to someone else, but it can be canceled by HW. The license is only given in order to let the Hostel owner accept online bookings in the Properties that are owned and operated according to the terms in this contract. The license will automatically expire at the end of the contract Term.

11.3 The Hostel can never copy or reproduce the HW Booking Engine or any of HW’s own technology (together the “HW Technology”). The Hostel also agrees not to try to find the source codes, decompile, or translate the HW Technology into any other computer language. This rule will still apply even after the contract has been terminated.

APPENDIX 1

1. The following conditions regarding payment and compensation will apply to make sure that the Hostel pays the Service Fee to HW:

1.1. if the Deposit is more than the Service Fee, then HW will keep the part that equals the Service Fee and pay the rest to the Hostel;

1.2. If the Deposit is less than the Service Fee, then HW will keep the entire Deposit and the Hostel will pay the difference to HW;

1.3. If the Deposit is equal to the Service Fee, then HW will keep the entire deposit and no money will change hands, and;

1.4. If HW (who only collects the Deposit on behalf of the Hostel) is ever required by law to refund the Deposit to a Customer, then the Hostel will pay the entire Service Fee to HW.

2. When the Hostel has to pay money to HW (in the situations described in paragraphs 1.2 and 1.4 of Appendix 1) the Hostel will make the payments either by setting up a method of direct debit or automated credit card payment so HW can take their money from the Hostel on a daily basis (unless both parties agree on an alternative method of payment). [For clarification: this means that HW can withdraw the money from the Hostel’s account every day, instead of the Hostel making a payment to HW]

When HW has to pay money to the Hostel (in the situation described in paragraph 1.1 of Appendix 1) HW will make the payment either (i) monthly (as a single payment for all money owed for the month) or (ii) by an alternative method, from time to time (whenever HW thinks it’s reasonable)