16. Unconscionability and unfairness

2018 ◽  
Author(s):  
Elizabeth Macdonald ◽  
Ruth Atkins ◽  
Jens Krebs
Keyword(s):  
Bargaining Power ◽  
Common Law ◽  
Good Faith ◽  
The Other ◽  
Freedom Of Contract ◽  
English Law ◽  
Unfair Terms

This chapter is concerned with unconscionability, good faith, and inequality of bargaining power. It is often stated that there are no such general doctrines in English Law. Concerns about uncertainty clearly play a part in this, and there is a tension between freedom of contract and intervening in the bargain reached by the parties on the basis of its substantive unfairness. There has, of course, been legislative intervention in relation to the use of unfair exemption clauses and unfair terms, more generally, in the consumer context (see Chapters 10 and 11) and, before such legislation, in particular, judges were prepared to manipulate common law rules on incorporation and construction (see Chapter 9) to deal with unfairness. This chapter principally deals with cases in which the courts have intervened in a contract, or refused to enforce it, where one party had some weakness in his or her position, in relation to the other, and that other has gained unduly advantageous terms.

9. Exemption clauses

2018 ◽  
Author(s):  
Elizabeth Macdonald ◽  
Ruth Atkins ◽  
Jens Krebs
Keyword(s):  
Bargaining Power ◽  
Common Law ◽  
Standard Form ◽  
Freedom Of Contract ◽  
Consumer Rights ◽  
The Common ◽  
The Law ◽  
Unfair Terms

This chapter begins the discussion of unfair terms. It deals with the common law rules relating to exemption clauses, and introduces the problems, as well as the benefits of standard form contracts. It looks at the common law rules dealing with incorporation and construction (interpretation) generally, and their use by the courts to deal with unfair exemption clauses, and the evolution of the use of such approaches in the light of legislative policing. In particular, it deals with incorporation by signature, notice (including the ‘red hand rule’), and a course of dealing, and looks at construction post-UCTA (Unfair Contract Terms Act 1977), and post-Investors, including the Canada Steamship rules and the distinction between limitation and exclusion clauses. The tension between freedom of contract and protecting the party with weaker bargaining power is emphasized. The chapter addresses how the Consumer Rights Act 2015 has impacted the law.

Contract Law in Practice

2021 ◽  
Author(s):  
Andrews Neil
Keyword(s):  
Common Law ◽  
Case Law ◽  
Detailed Examination ◽  
Contract Law ◽  
Good Faith ◽  
Fair Dealing ◽  
Freedom Of Contract ◽  
Compensation Principle ◽  
The Common ◽  
English Law

This book is a detailed examination of the general doctrines of English law of contract. Cases are analysed precisely, providing quick access to the major authoritative passages in the leading judgments. The coverage is comprehensive. It focuses on English law, but it also provides analysis of assistance throughout the Common Law family of legal systems. It provides up-to-date examination of case law developments. There are nearly fifty ‘evaluation’ sections which provide comment on controversial or unclear topics. Six major principles are identified: Freedom of Contract; Objectivity; the Contractual Bond Principle; Estoppel; Good Faith and Fair Dealing; the Compensation Principle.

Common Lawà l'americaine

1966 ◽  
Vol 1 (4) ◽  
pp. 562-579 ◽  
Author(s):  
A. M. Apelbom
Keyword(s):  
Common Law ◽  
The Other ◽  
British Occupation ◽  
Other Hand ◽  
Two Generations ◽  
The Common ◽  
English Law ◽  
Considerable Body ◽  
Clear Line

Eighteen years after attaining independence Israel remains essentially a common law country. Introduced by the British Mandatory administration to supplement the Ottoman legislation in force at the time of the British occupation of Palestine, the common law has been retained by the Israeli legislator, so far as not modified or replaced by local legislation. But this common law, far from being residual only, also embraces a considerable body of interstitial law developed by two generations of judges, British, Palestinian and Israeli, in the process of applying and interpreting statute law—whether Ottoman, Mandatory or Israeli—according to common law methods. On the other hand the importation of common law institutions was neither wholesale nor systematic and in a number of fields no clear line of demarcation can be drawn between domestic and English law.

scholarly journals GOOD FAITH IN FRANCHISE CONTRACT

2020 ◽  
Vol 5 (19) ◽  
pp. 118-127
Author(s):  
Nurli Yaacob ◽  
Nasri Naiimi
Keyword(s):  
Common Law ◽  
Good Faith ◽  
Relational Contracts ◽  
Law System ◽  
Freedom Of Contract ◽  
Term Contract ◽  
The Common ◽  
Definition Of ◽  
The Right

Good faith has been defined as justice, fairness, reasonableness, decency, taking no chances, and so on. The concept of good faith has long been rooted in contract law under the jurisdiction of Civil law, although the definition of it is still debated until today. However, the view of the Common Law tradition does not recognize the concept of good faith as long as the contract is entered into with the freedom of contract and both parties abide by the terms of the contract. Given that a franchise contract involves a long-term contract and always been developed, it is impossible to define both rights and responsibilities base on express terms only. As such, the franchise contract gives the franchisor the right to exercise its discretion in executing the contract. It is in this context that the element of good faith is very important to ensure that the franchisor does not take advantage of the franchisee and that the business continues to prosper. Therefore, the objective of this article is to discuss the concept of good faith in a franchise contract. The findings show that the common law system that initially rejected the application of the concept of good faith also changed its approach and began to recognize the concept of good faith as it is very important for relational contracts such as franchise contracts.

The Legal Landscape of Contract Formation: Towards a Distinct Malaysian Jurisprudence?

2018 ◽  
Author(s):  
Tay Pek San
Keyword(s):  
Common Law ◽  
Civil Law ◽  
The Other ◽  
Contract Formation ◽  
Analytical Structure ◽  
English Law

This chapter examines the formation of contract under Malaysian law. The Malaysian Contracts Act 1950 (‘MCA 1950’) is modelled on the Indian Contract Act 1872 (‘ICA 1872’). In common with the ICA 1872, the analytical structure for the formation of contract is strikingly similar to that of English law, with unique definitions introduced by the ICA 1872. A proposal, upon acceptance by the person to whom the proposal is directed, becomes a promise; reciprocal promises which constitute consideration for each other result in an agreement; upon the satisfaction of the other conditions for the formation of contract, a contract is constituted. The continuing influence of English common law on Malaysian law is expressly provided by sections 3 and 5 of the Civil Law Act 1956; these form the basis for the reception of the doctrine of promissory estoppel which is absent in the text of the MCA 1950. Where the MCA 1950 does not preclude the adoption of English legal developments, the Malaysian courts have been ready to adopt such developments.

scholarly journals Limits on Contractual Freedom

2019 ◽  
Author(s):  
Michael Bridge
Keyword(s):  
Common Law ◽  
Public Law ◽  
Good Faith ◽  
Fair Dealing ◽  
Contractual Term ◽  
English Law

Abstract This article is concerned with an important feature of English law that distinguishes it sharply from civilian systems of law and, to a lesser extent, from other common law systems—namely, its eschewal of an imposed duty of good faith and fair dealing. It will be shown that English law is receptive to such a standard in particular cases but that much of the ground that may be thought to be covered by good faith and fair dealing is covered instead by controls on the exercise of contractual discretion by reference to an implied contractual term that the discretion not be exercised in a way that is capricious, arbitrary, or irrational. This body of law has grown up in the last 30 years or so and has been influenced to a degree by public law considerations.

13. Controlling contract terms

Contract Law ◽  
2019 ◽  
pp. 371-403
Author(s):  
TT Arvind
Keyword(s):  
Consumer Protection ◽  
Common Law ◽  
Freedom Of Contract ◽  
Liquidated Damages ◽  
Consumer Contracts ◽  
The Common ◽  
The Law ◽  
Unfair Terms ◽  
Formal Requirements ◽  
Statutory Regulation

This chapter examines how the law regulates contract terms, with particular emphasis on rules that are intended to protect weaker parties. It begins with a discussion of the limits of freedom of contract and proceeds by assessing the role played by formal requirements, such as the requirement that contracts be in writing. It then considers how the law regulates contract terms which seek to alter the liability that one party will have in the event of breach. More specifically, it looks at exclusion clauses in the common law and the statutory regulation of such clauses, along with liquidated damages, contractual remedies, and the rule against penalties. It also explores the extent to which consumer protection law restricts the terms that can be included in consumer contracts, especially when dealing with the problem of unfair terms.

FORMULATING A FRAMEWORK FOR DIRECTORS’ DUTIES TO CREDITORS: AN ENTITY MAXIMISATION APPROACH

2005 ◽  
Vol 64 (3) ◽  
pp. 614-646 ◽  
Author(s):  
Andrew Keay
Keyword(s):  
General Principle ◽  
Common Law ◽  
The Other ◽  
Financial Difficulty ◽  
English Law ◽  
A Company

IT is now well settled in English law, as well as in several other common law jurisdictions, that when their company is in some form of financial difficulty, directors cannot ignore the interests of their companies’ creditors, but rather they have a duty to their company to consider those interests. This is all well and good, but while this general principle has been stated on many occasions by various courts, the courts have been slow to define important aspects of this responsibility. There are two major issues that have not been clarified. The first is this: from what point is the duty to consider creditor interests imposed on directors? There has been no unanimous judicial pronouncement on this issue, and this has produced some uncertainty. We know with some certainty that the duty does not operate where a company is clearly solvent. At the other extreme, we have certainty in that courts have said that the duty does apply where a company is insolvent.

scholarly journals PENERAPAN ASAS ITIKAD BAIK DAN KEPATUTAN DALAM PERJANJIAN WARALABA (The application of Good Faith and Conscionability Principles within Franchise Agreements)

2018 ◽  
Vol 6 (3) ◽  
Author(s):  
Ery Agus Riyanto
Keyword(s):  
Research Result ◽  
Research Problem ◽  
Good Faith ◽  
The Other ◽  
Literary Study ◽  
Research Approach ◽  
Business Negotiation ◽  
Freedom Of Contract ◽  
Standard Contract ◽  
Bargaining Position

<p>Secara tradisional suatu perjanjian terjadi berlandaskan asas kebebasam berkontrak di mana dua pihak yang mempunyai kedudukan yang seimbang berusaha untuk mencapai suatu kesepakatan yang diperlukan bagi terjadinya perjanjian itu melalui suatu proses negosiasi diantara mereka. Dewasa ini kecenderungan makin nyata bahwa banyak perjanjian di dalam transaksi bisnis yang terjadi bukan melaui proses negosiasi yang seimbang di antara para pihak, tetapi perjanjian itu terjadi dengan cara pihak yang satu telah menyiapkan syarat-syarat baku pada suatu formulir perjanjian yang sudah dicetak dan kemudian disodorkan kepada pihak lainnya untuk disetujui. Perjanjian yang demikian ini lazim disebut perjanjian baku.</p><p>Permasalahan yang muncul adalah apakah  perjanjian baku yang dibuat oleh para pebisnis tidak bertentangan dengan asas kebebasan berkontrak, itikad baik, dan kepatutan. Andaikata dalam perjanjian yang dibuat secara baku terdapat ketentuan/pasal  yang merugikan salah satu pihak dapatkah hakim untuk menganulir pasal tersebut dengan mendasarkan pada asas itikad baik dan kepatutan. Hasil penelitian menunjukkan telah terjadi pelanggaran terhadap asas kebebasan berkontrak, asas konsensual, dalam merumuskan isi di dalam perjanjian tersebut khususnya pada pasal-pasal yang mengatur hak dan kewajibn para pihak.Terlalu banyak kewajiban yang harus dilakukan oleh pihak francisee tetapi hak yang dimilikinya sangat sedikit. Sebaliknya banyak pasal yang mengatur hak-hak franchisor, akan tetapi sangat sedikit yang mengatur kewajibannya. Hasil penelitan juga menunjukkan hakim dapat menghapuskan pasal-pasal yang diduga sengaja dibuat untuk memberikan keuntungan kepada salah satu pihak atau membebaskan salah satu pihak dari tanggung jawab yang semestinya harus dipikulnya.</p><p> </p><p><em>Traditionally, a contract performs based on the result of prior negotiation between the parties, who have an equal bargaining position. Recently the trend shows many businessmen doing their businesses did not base on equal business negotiation, but one party already set forth standard requirements in an agreement form, then offers to the other party. Commonly the other party only has two options, agree or disagree (take it or leave it) without has an authority for changing the standard requirements. That agreement/contract knows as adhesion agreement or adhesion contract.</em><em> The research problem which come up; are the standard requirements in standard contract or agreement not in contrary with Freedom of Contract, consensus, Good Faith and Conscionability Principles. The other problem is: is it possible for judge to omit the standard requirements which set intentionally to get much advantages for one party and give disadvantages effect to the other party, based on the Good Faith and Conscionability Principles.</em><em> The research result </em><em>which held by normative research approach, shows, the strong party (Franchisor) breached the Freedom of Contract, and consensu</em><em>al principles. He did not arrange the obligations and rights of the parties proportionally. From the franchise agreements we know there were many articles or clauses, which set the franchise obligation, but not many clauses arranged franchise rights.</em><em> In contrary many clauses set franchisor rights with a less obligations. Based on the literary study judge has rights to omit the clauses which strongly potential to give disadvantages to one party and give advantages to the other party.</em><em></em></p>

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