standard form contract (sometimes referred to as adhesion contract, leonine contract, take-it-or-leave-it contract, or contract boilerplate ) is a contract between two parties, in which the terms and conditions of the contract are established by either party, and the other party has little or no ability to negotiate more favorable terms and thus is placed in the "take or leave" position.
Although this type of contract is not illegal per se , there is a very real possibility for discretion. Moreover, in the case of ambiguity, such ambiguity will be resolved counter proferentem against the party that makes up the contract language.
Video Standard form contract
Theoretical issues
There is much debate on the theoretical level of whether, and to what extent, the courts should enforce contracts of standard form.
On the one hand, they are undeniably fulfilling an important role to improve economic efficiency. Standard contract forms reduce transaction costs substantially by blocking the needs of buyers and sellers of goods and services to negotiate many sales contract details each time the product is sold.
On the other hand, there is the potential for inefficient, and even unfair, terms to be accepted by signatories to these contracts. Such provisions may be considered unfair if they allow the seller to avoid all obligations or unilaterally modify the terms or terminate the contract. These terms often come in the form, but are not limited to, forum selection clauses and mandatory arbitration clauses, which may restrict or close court access; as well as the liquidated liquidation clause, which sets a limit on the amounts that can be recovered or require a party to pay a certain amount. They may be inefficient if they place the risk of negative outcomes, such as defective manufacturing, on buyers who are not in the best position to take precautions.
There are a number of reasons why the term is acceptable:
- Standard form contracts are rarely read
- Long term boilerplate terms are often well printed and written in complicated legal languages ​​that often seem irrelevant. The prospect of a buyer finding useful information from reading such terms is also very low. Even if the information is found, the consumer is not in a bargaining position because the contract is presented on a "take or leave" basis. Coupled with the amount of time that is often required to read the provisions, the expected results from low reading contracts and some people will be expected to read them.
- Access to full terms may be difficult or impossible before acceptance
- Often signed documents are not full contracts; the buyer is notified that the remaining requirements are in another location. This reduces the likelihood of terms being read and in some situations, such as software license agreements, can only be read after being accepted logically by buying a good and open box. These contracts are usually not enforced, since the general law states that all contract terms must be disclosed before the contract is executed.
- The term boilerplate is not prominent
- The most important terms for buyers of goods are generally price and quality, which are generally understood before the adhesion contract is signed. Terms relating to events that have very little chance of occurring or that refer to a particular law or rule of law appear to be unimportant to the buyer. This further decreases the probability of those terms being read and also means they tend to be ignored even if they are read.
- There may be social pressure to enter
- The standard contract contract is signed at the point when the main details of the transaction have been negotiated or explained. The social pressure to conclude bargaining at the time may come from a number of sources. Sellers can imply that buyers do not make sense if they read or question the terms, say they're "just something the lawyers want us to do" or that they're wasting their time reading them. If the buyer is in front of the queue (eg at the airport car rental desk) there is additional pressure to enter quickly. Finally, if there is any negotiation concerning a specific price or detail, the concession given by the salesperson may be seen as a gift that socially obliges the buyer to respond by being cooperative and completing the transaction.
- Standard form contracts can exploit unequal power relationships
- If goods sold under an adhesion contract are either very important or very important for buyers to purchase (such as property rents or medical goods required) then buyers may feel they have no choice but to accept the terms. This problem can be mitigated if there are many potential suppliers offering different requirements (see below), although this is not always possible (for example, a new student may need to sign a standard-form dormitory lease agreement and accept the conditions, since the college will not allowing new students to live off campus).
Some argue that in a competitive market, consumers have the ability to shop for suppliers who offer them the most profitable terms and consequently are able to avoid injustice. However, in the case of credit cards (and other oligopolies), for example, temporary consumers have the ability to shop around may still have access to only form contracts with similar requirements and no chance for negotiations. Also, as noted, many people do not read or understand these terms so there may be very little incentive for companies to offer favorable conditions because they will get just a small amount of business from doing so. Even if this is the case, it is argued by some that only a small proportion of buyers need to actively read the standard form contracts for it to be beneficial for the company to offer better terms if the group is able to influence more people by affecting the company's reputation.
Another factor that may reduce the impact of competition on the content of adhesion contracts is that, in practice, standard form contracts are usually drawn up by lawyers who are instructed to build them so as to minimize corporate responsibility, not necessarily implementing manager's competitive decisions. Sometimes contracts are written by industry agencies and distributed to companies in the industry, increasing the homogeneity of contracts and reducing the ability of consumers to shop.
Maps Standard form contract
General legal status
As a general rule, common law treats contracts of standard forms like other contracts. Signatures or multiple manifestations of other purposes of legally bound intention shall be binding on contract signings whether they read or understand the terms. The reality of standard form contracts, however, means that many jurisdictions of common law have developed specific rules regarding them. Generally speaking, in the event of ambiguity, the court will interpret the contractual contra proferentem contractual contract against the party making the contract, since that party (and only that party) has the ability to draw up a contract to remove ambiguity.
United States
Generally
Standard form contracts are generally applicable in the United States. The Uniform Commercial Code that is followed in most American states has special provisions relating to the standardized contract contract for the sale or rental of goods. Furthermore, standard form contracts will be subject to special scrutiny if they are found as an adhesion contract.
Adhesion contract
The concept of adhesion contracts stems from French civil law, but does not enter American jurisprudence until the Harvard Law Review published an influential article by Edwin W. Patterson in 1919. It was later adopted by the majority of American courts, especially after the Supreme Court California supported the adhesion analysis in 1962. View Steven v. Fidelity & amp; Casualty Co. , 58 Cal. 2d 862, 882 n.10 (1962) (explaining the history of concepts).
For contracts to be treated as adhesion contracts, they should be presented on a standardized form on a "take or leave" basis, and give one party no ability to negotiate due to their unequal bargaining position. Special examinations given for adhesion contracts can be done in several ways:
- If the term is beyond the reasonable expectation of the person not writing the contract, and if the parties contracts unequally, then it will not be enforced. Reasonable expectations are judged objectively, by looking at the superiority of the term, the purpose of the terms and circumstances surrounding the acceptance of the contract.
- Section 211 of the American Law Institute's Restatement (Second) of the Contract, which has a persuasive though non-binding force in court, provides:
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- Where the other party has reason to believe that the party who embodies the agreement will not do so if he/she knows that the article contains a particular term, the term is not part of the agreement.
- This is a subjective test that focuses on the seller's mind and has been adopted by just a few state courts.
- The doctrine of discretion is a fact-specific doctrine arising from just principles. Non-conformity in the form of standard contracts typically arises where there is "no meaningful choice on the one hand because of the terms of one side contract, along with a term so oppressive that no reasonable person will make it and no fair and honest person will receive it. "( Fanning v. Pontiac-Cadillac-Buick Inc. Fritz. )
contract Shrink wrap
Courts in the United States face contract shrink wrap issues in two ways. One line of the following case ProCD v. Zeidenberg who entered into such a contract may be enforced (eg Browser v Gateway ), and others follow Klocek v. Gateway, Inc. , which finds them unenforceable. These decisions are divided into questions of consent, with prior ownership only the manifestation of the purpose of approval is required whereas the latter requires at least the possibility of subjective agreement.
Canada
In Canada, an exception clause in a standard form contract is unreliable in which the seller knows or has reason to know the buyer misrepresents the term ( Tilden Rent-A-Car Co. v. Clendenning ).
Australia
Standard form contracts generally receive only a small amount of special treatment under Australian common law. The 2003 case of the New South Wales Court of Appeal ( Toll (FGCT) of Pty Limited v Alphapharm Pty Limited ) provided some support for the position that extraordinary notice notices are required for them to be included. However the defendant successfully filed an appeal to the High Court so there is currently no special treatment of standard form contracts in Australia.
From 1 January 2011, the Australian Consumer Law has been enacted in Australia at the national level, and due to the Council of Australia Government (COAG) agreement, this law is now part of any Trade Fair (state or territory) law.
India
In India, leonine contracts are generally regarded as unceremonious contracts (though not all leonine contracts are unambiguous) and can be canceled. The 1991 Law Commission Report (2006) on "UNFAIR REQUIREMENTS (PROCEDURAL & SUBSTANTIVE) IN CONTRACT" handles it. Injustice can be procedural or substantive.
Legislation
In recognition of consumer protection issues that may arise, many governments have passed specific laws relating to standard form contracts. This is generally enforced at the state level as part of general consumer protection laws and usually allows consumers to avoid unreasonable clauses found, although special provisions vary widely. Some laws require a notice for this clause to be effective, others prohibit an unfair clause altogether (eg Victorian Fair Trading Act 1999).
United Kingdom
Part 3 of the 1977 Unilateral Contract Act limits the ability of the consumer conceptor or standard-form contract to draft a clause that would allow him to exclude liability in so-called exclusion clauses - non-seamless action in other areas for ordinary people looks "unfair". When a contract is negotiated, the provisions of that action are unlikely to be applicable - the law protects from many things but openly making bad offers is not one of them.
Israel
The Standard Forms Act Act 1982 defines a set of grab conditions that can be undone by a court of law, including unreasonable exceptions or limitation of liability, unreasonable privileges to unilaterally undo, suspend or suspend the exercise of contracting and alter any fundamental fees or pricing, transfer of liability for contracts to third parties, unreasonable obligations to use third party services or to restrict, in any way, the choice to contract third parties, the refusal of legal remedies, no sense of contractual remedy or unreasonable arrangement of conditions for the refinement of the drug, denying or limiting the right to procedural law, the exclusive right to decide the location of the hearing or arbitration, compulsory arbitration with unilateral control over the arbitrator or arbitration location and the setting of the burden of proof b contrary to common law. This action also establishes the Standard For Contracts Court , is headed by a district judge and consists of a maximum of 12 members, appointed by the minister of justice, including acting chairman (also a district judge), civil servant (Not more than third) and, at least, 2 representatives of consumer organizations. The Court held hearings on appeals against standard form contract clauses or approval of contracts of certain standard forms at the request of the provider.
Lithuania
Standard conditions in Lithuania are pre-prepared provisions for general and recurrent use by contracting parties without their content negotiated with others, and used in contract formation without negotiation with others. Standard conditions prepared by either party shall be binding on the other if the latter is given sufficient opportunity to become acquainted with the condition (Section 6.185.Conditional contract conditions, the Lithuanian Civil Code). Consumers shall have the right to claim in judicial proceedings for invalidity of conditions in consumer contracts contrary to criteria of good faith (Section 6.188).
State of civil law
Russian
In July 2013, Russian Dmitry Agarkov won a court case against Tinkoff Bank after he changed the form of the standard contract he received by mail. Bank, failed to see the changes, received the application and gave him the account under the changed contract. The judge ruled that the bank was legally bound to a signed contract. Agarkov later sued the bank for failing to comply with the terms it added to the contract, which was unanimously approved by signing the contract. Agarkov's lawyer Dmitry Mihalevich said: "They signed the document without looking.They say what borrowers usually say in court: 'We have not read it yet'."
See also
- Electronic Signatures in the Global and National Trade Law (ESIGN, USA)
- Hobson Options
- Non est factum
- Terms of service
References
External links
- Joint Contract Contracts for the UK Building Industry
- CLAB Database of the European Commission
Source of the article : Wikipedia
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