Standard Form

Contract
(Boilerplate/Take it or Leave it Contracts)
 Meaning
A standard form contract sometimes referred to as an adhesion
contract or boilerplate contract is a contract between two parties that
does not allow for negotiations, i.e. take it or leave it. It is often a
contract that is entered into between unequal bargaining partners,
such as when an individual is given a contract by the sales - person of a
multinational corporation. The consumer is in no position to negotiate
the standard terms of such contracts and the company's representative
often does not have the authority to do so.
 Meaning
• An example of a standard form contract is a standardized contract
form that offers goods or services to consumers on essentially a "take
it or leave it" basis without giving consumers realistic opportunities to
negotiate terms that would benefit their interests. When this occurs,
the consumer cannot obtain the desired product or service unless he
or she acquiesces to the pre-drafted terms of the contract.
Protective Devices against Standard
Form Contract
In the Contract of Adhesion, the individual has no choice “but to accept”;
he doesn’t negotiate, but merely adheres. Therefore individual deserves
to be protected against the possibility of exploitation inherent in such
contracts. Some of the modes of protection which has been developed
by the courts are as follows:
1) REASONABLE NOTICE
2) NOTICE SHOULD BE CONTEMPORANEOUS WITH THE CONTRACT
3) FUNDAMENTAL BREACH OF CONTRACT
4) Contra Proferentem
5) Liability in Torts
 REASONABLE NOTICE

It is the duty of the person who is delivering a

document to give adequate notice to the offeree of the
printed terms and conditions. Where it is not done, the
acceptor will not be bound by the terms.
 NOTICE SHOULD BE
CONTEMPORANEOUS WITH THE
CONTRACT
If a party to the contract wants to have exemption from
liability he must give notice about the exemption while
the contract is being entered into and not thereafter. If
the contract has been entered into without any
exemption clause then subsequent notice regarding the
exemption from liability will be in effective.
 FUNDAMENTAL BREACH OF
CONTRACT
Another device which has been adopted to protect the interest of the
weaker of the parties to the contract when they have an unequal
bargaining position is to see that enforcing the terms of contract does
not result in the fundamental breach of contract. In a standard form of
contract it is likely that the party having a stronger bargaining power
may insert such exemption clause in the contract that his duty to
perform the main contractual obligation is thereby negative.
 LIABILITY IN TORTS
Even where an exemption clause is exhaustive enough to exclude all
kinds of liability under the contract, it may not exclude the liability of
torts.

Example: Hire and Purchase Agreements

 Contra Proferentem
Where the words used in an exemption clauses are capable of two
constructions, a wider construction and limited construction, then the
limited construction would be preferred for the rule of law that every
exception clause is to be interpreted in case of ambiguity, contra
proferentem. It means in case of any doubt ambiguity will be resolved
against the party who has inserted it.