Unfair Terms Of A Standard Form Contract

1203 Words Aug 28th, 2014 5 Pages
Unfair Terms
The law states that the term in a standard form contract is unfair, if it is: “ firstly, a term would cause a significant imbalance in the parties’ rights and obligations. Secondly, the term is not reasonably necessary to protect the legitimate interests of the party that would be advantaged by the term. Thirdly, the term would cause detriment to a party if it were to be applied or relied on.”
Examples of Unfairness and Suggested Actions (Ranked examples):
1.Read and Understand Declaration
Facts: It is very common that a contract may contain a declaration purporting the customer has read and understood the contract. For example, when people try to install a new software on the computer or register a new online account, they have to sign the declaration in order to complete the process.
Unfairness: The contract usually has dozens of pages, and is complex. A consumer may not be able to read over it, or even they did, they would not be able to understand it. Therefore, the supplier could add many unfair terms to the contract and put the customers in an adverse situation. Moreover, where a consumer finds any term unfair subsequent to the making of contract, he may be misled by such a declaration into believing that he has to abide the term in any case and is not entitled to seek redress in court.
Suggested Action: (i) The contract should be short and simple. Such a declaration should be replaced by a clear warning indicating “ customers should read and understand…
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