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Report No. 199


It will be seen that the Apex Court either applied Article 14 in cases where unreasonable term were imposed by an entity which was a 'State' within Article 12, or applied section 23 of the Indian Contract Act, 1872. The only substantive development was that the Court was not confined to existing heads of public policy. Though in certain cases, it was observed that Article 14 could not be applied to commercial contracts entered by entities which were a 'State' within Article 12 of the Constitution, in some cases section 23 was invoked against such entities to grant relief. The various decisions rendered by the Court would reveal that the above procedures were adopted because the court was otherwise handicapped in giving relief because of the absence of a general power given by a statute to strike down 'unreasonable clauses'.

Unfair (Procedural and Substantive) Terms in Contract Back

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