Dr.

RAM MANOHAR LOHIYA NATIONAL LAW

UNIVERSITY

Contracts-I
Project on: -
Standard Form of Contract: An Analysis in Contemporary
Relevance
Submitted by:

Submitted to:
ACKNOWLEDGEMENT
TABLE OF CONTENT
INTRODUCTION

A standard form of contract is a contract between two parties, where the terms and
conditions of the contract are set by one of the parties, and the other party has little or no
ability to negotiate more favourable terms and is thus placed in a “take it or leave it” position.
Hence these are sometimes referred to as ‘boilerplate contracts’, ‘contracts of adhesion’, or
‘take it or leave it’ contracts.

Standard form, business-to-consumer contracts play a vital role in the efficient distribution of
goods and services. These contracts have the potential to lower transaction costs by removing
the need to negotiate the various specifics of a contract every time a product or service is sold
or utilised.

While these contracts are not unlawful in and of themselves, they nevertheless have the
potential to be unconscionable. Furthermore, in the event of an ambiguity, the ambiguity will
be resolved against the party who drafted the contract wording contra proferentem.

There is much debate on a theoretical level whether, and to what extent, courts should
enforce standard form contracts. On one hand, they undeniably fulfil an important role of
promoting economic efficiency. While on the other hand, signatories to these contracts may
accept inefficient and even unjust terms. If such provisions allow the seller to avoid all
accountability, unilaterally amend terms, or terminate the contract, they may be considered
unreasonable.

These conditions include, but are not limited to, forum selection agreements and obligatory
arbitration clauses, which can limit or prevent a party from going to court; and liquidated
damages clauses, which limit the amount that can be recovered or oblige a party to pay a
certain amount. They may be inefficient if they place the risk of a negative outcome, such as
defective manufacturing, on the customer, who may not be in the best position to protect
himself.

The danger of accepting unfair or unconscionable terms is greatest where these artful drafters
of such contract’s present consumers with attractive terms on the visible or “shopped” terms
of most interest to consumers, such as price and quality, but then slip one-sided terms
benefiting the seller into the less visible, fine print clauses least likely to be read or
understood by consumers.  In many cases, the consumer may not even see these contracts
until the transaction has occurred.  In some cases, the seller knows and takes advantage of the
knowledge that consumers will not read or make decisions on these unfair terms.

WHAT ARE STANDARD FORM CONTRACTS

Definition, existing jurisprudence, case laws, etc. (Avatar Singh se chaapna hai
basically).

Important Contemporary Cases of Standard Form Contracts

Recommendation of Law Commission, opinions of jurists, Indian case laws,

WhatsApp privacy case.

LEGISLATION/CASE LAWS IN OTHER COUNTRIES

A brief survey of some of the methods evolved to meet the problem may help us better to
analyse the situation in our country.

United States

The concept of adhesion contracts owes its origin to French civil law. 1 However, it was
popularised in American judicial parlance after the endorsement of the concept in 1962 by the
California Supreme Court in Steven v Fidelity & Casuality Co2.

CONCLUSION

Humari maange consideration mein lo.

1
Mo Zhang, ‘Contractual Choice of Law in Contracts of Adhesion and Party Autonomy’ (2008) Akron LR 41
<http://ideaexchange.uakron.edu/akronlawreview/vol41/iss1/1?utm_source=ideaexchange.uakron.edu
%2Fakronlawreview%2Fvol41%2Fiss1%2F1&utm_medium=PDF&utm_campaign=PDFCoverPages> accessed
29 June 2021.
2
58 Cal 2d 862.