Air Canada must follow the refund policy created by their chatbot.

The notable case of Air Canada being mandated by small claims court to abide by a refund policy proposed by its automated voice assistant during a customer interaction.


A recent breach of contract claim against Air Canada brought to light an interesting scenario. The leading airline was ordered to honor a refund policy disseminated unknowingly by its digital chatbot. The policy deviated from standard protocol, sparking debates on tech, company responsibility, and user agreements in the digital age.

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The case surfaced when a couple, Laura and Bryan Wood, sought a ticket refund from Air Canada. When denied, they turned to the company's AI assistant for help, leading to an unexpected turn of events.

Air Canada must follow the refund policy created by their chatbot. ImageAlt

In seeking communication convenience, chatbots have become prevalent. However, when artificial intelligence steps in to handle customer inquiries, the matter of claimed responsibility can often slip through the cracks.

Depicting such a situation, this article delves into the case where Air Canada was legally bound to adhere to the refund policy offered by its own AI chatbot.

Initiation of the Case

Laura and Bryan booked tickets for a 2020 trip with Air Canada. However, amidst the COVID-19 outbreak, they decided to cancel the flight. They requested a refund from the airline, only to be denied.

In response, Laura sought assistance via Air Canada’s online chatbot and was offered their ticket price as future travel credit instead.

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The offered resolution was contradictory to Air Canada's policy of not providing refunds or credits for non-refundable tickets. Believing it to be true, Bryan accepted the chatbot's proposition, realising later that it had been a misunderstanding.

Considering themselves misled, the Woods filed a case against Air Canada for breach of contract in Seattle’s small claims court.

Defending the Claim in Court

During court proceedings, the couple claimed that Air Canada had failed to communicate its refund policy accurately through its digital assistant. They presented screenshots of the chatbot conversation as pieces of evidence.

Various points were argued, including whether an AI's statements could represent a company's binding commitment. The legitimacy of the AI’s promise was also debated.

Additionally, the company’s intent behind implementing the chatbot surfaced, questioning if it was designed to offer legal advice. Air Canada argued that their chatbot was simply an informational tool, not a source of professional counsel.

Despite defenses, the court was convinced that the couple had been misled by the unfounded promise made by the chatbot, resulting in a ruling in favor of the consumers.

Implications of the Judgment

The court’s decision sets a precedent that a company can be held responsible for misleading information presented by its automation tools. Such a precedent is significant in the contemporary business environment, where AI is frequently used to interact with consumers.

The case also shines a spotlight on the vital role of disclosure and transparency in digital communications. Accurate representation of policies and offers were key points in the verdict.

Moreover, this incident prompts a review of how companies impart knowledge, policies and expectations to their AI systems. It emphasizes the stakes and potential repercussions, legally and reputationally, if such communication tools disseminate erroneous information.

Lastly, this case looks into the upgrade, maintenance, and regulation of AI systems, and stresses the necessity of monitoring and rectifying potential inaccuracies their databases might generate.

Parting Note

As the verdict was delivered, the decision of Seattle’s small claims court became a topic of global discussion. By legally binding Air Canada to hold true to a claim made by their digital assistant, the court has opened a new chapter on the enforcement of liabilities concerning artificial intelligence.

This case reinforces the significance of AI accuracy and the critical need for companies to monitor their automation tools. Misinformation presented by these tools can open the company to legal liabilities and potentially significant repercussions.

As automation continues to be a norm in customer service, this situation serves as a lesson for companies worldwide. Clearly defining the role and limitations of AI-based systems and educating them, figuratively, on the business’s policies can aid in avoiding legal and ethical dilemmas.

Overall, the Air Canada case is enlightening, posing questions on AI reliability, the importance of transparency, the value in monitoring of automated systems, and the array of challenges yet to be faced in the digital age.