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Simple English definitions for legal terms
overbooking
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A quick definition of overbooking:
Overbooking: Overbooking is when a business accepts more reservations than they have room for, assuming that some people will cancel. This is done to save money and make more profit. Airlines often overbook, but they have to offer compensation or alternative transportation if they deny someone a seat.
A more thorough explanation:
Overbooking is when a business accepts more reservations for a service than it can actually provide. This is often done because the business assumes that some people will cancel their reservations, so they want to make sure they have enough customers to make a profit.
For example, an airline might sell more tickets for a flight than there are seats on the plane. They do this because they know that some people will cancel their reservations or not show up for the flight. By overbooking, the airline can make sure that all the seats are filled and they can make as much money as possible.
However, overbooking can cause problems if too many people actually show up for the service. For example, if too many people show up for a flight, the airline might have to deny boarding to some passengers. This can be frustrating for the passengers who are denied boarding, and it can lead to lawsuits against the airline.
Overall, overbooking is a way for businesses to maximize their profits, but it can also lead to problems if too many people actually show up for the service.