A Critical Analysis of Standard Form of Contracts in India and UK

A Critical Analysis of Standard Form of Contracts in India and UK

Saavir Kuckreja

Pulkit Sharma

ABSTRACT

The establishment of a contemporary firm typically involves the use of a standard form contract. There are now two distinct applications for it. First, when the parties' respective bargaining powers are comparable, which ensures fairness; and second, when organizations with substantially higher bargaining power take use of this process to include favorable conditions. The purpose of this paper is to elaborate on the development of standard form contracts in India and UK and find that in order to prevent their misuse, courts have applied special rules of interpretation that assign a higher value to the purpose of the contract, and they have even nullified contracts when their material part was affected by unconscionability. This finding is made while the paper is discussing the evolution of standard form contracts. The conflict of forms is yet another challenge that these types of contracts have to overcome. Nevertheless, the courts have not been able to agree on a single rule to use in order to solve this problem. This paper begins with a literature review on the topic and analysis of the current legal position on the topic at hand. It then goes on to answer the research objectives and argues that the courts should always apply the knock-out rule because it strikes a balance between the law on consensus ad idem and the principle of acceptance of the contract by performance.

Keywords: Contract terms, Standard form contract, Bargaining power, Battle of forms, Counter-offer, Unconscionable terms