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Report No. 199

Our definition of 'contract' in section 2(a) of the Bill will be as follows:

"Section 2(a): 'Contract' means a contract as defined in clause (h) of section 2 of the Indian Contract Act, 1872 (9 of 1872) and includes an agreement as defined in clause (e) of section 2 of that Act.


So far as the definition of 'Court' is concerned, obviously it must include civil courts of competent jurisdiction. The definition must include 'arbitral tribunals' also which enforce contracts. At one time, there was some doubt if an arbitral tribunal could direct or refuse specific performance. But the decision of the Supreme Court in Olympus Superstructures Pvt. Ltd. vs. Meena Vijay Khatain : (1999 (5) SCC 652) has clearly held that though there is an element of discretion involved, the arbitral tribunal is competent to exercise discretion and direct or refuse specific performance. The judgment of the Calcutta High Court was approved and the judgment of Delhi High Court was overruled.

So far as the various consumer fora under the Consumer Protection Act, 1986 are concerned, we are of the view that the said fora must have the benefit of the provisions relating to 'general procedural unfairness' in section 5 and to the guidelines in section 6 and so far as 'substantive unfairness' is concerned, to sections 9, 10, 11, 12 and the guidelines in section 13 and the burden of proof in section 14. In fact, in several countries, the unfair terms contract provisions are applied to consumer contracts. In UK, there is a separate chapter for consumer contracts and in some countries there are such statutes separately for consumer contracts.

Unfair (Procedural and Substantive) Terms in Contract Back

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