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Report No. 199

Guidelines: for procedural unfairness: section 6

We have culled out a number of guidelines for judging whether a contract or its terms are 'procedurally unfair' from the available legal literature set out in Chapter VIII.

They are as follows as stated in section 6:

"6. For the purposes of section 5, the Court may take into account the following circumstances, namely:-

(a) the knowledge and understanding of the promisee in relation to the meaning of the terms thereof or their effect;

(b) the bargaining strength of the parties to the contract relative to each other;

(c) reasonable standards of fair dealing or commonly accepted standards of dealing;

(d) whether, or not, prior to or at the time of entering into the contract, the terms were subject to negotiation or were part of a standard terms contract;

(e) whether or not it was reasonably practicable for the party seeking relief to negotiate for the alteration of the contract or a term thereof or to reject the contract or a term thereof;

(f) whether expressions contained in the contract are in fine print or are difficult to read or understand;

(g) whether or not, even if he or she had the competency to enter into the contract based on his or her capacity and soundness of mind, he or she

(i) was not reasonably able to protect his or her own interests or of those whom he or she represented at the time the contract was entered;

(ii) suffered serious disadvantages in relation to other parties because he or she was unable to appreciate adequately the contract or a term thereof or their implications by reason of age, sickness, physical, mental, educational or linguistic disability, emotional distress or ignorance of business affairs.

(h) whether or not independent legal or other expert advice was obtained by the party seeking relief under this Act;

(i) the extent (if any) to which the provisions of the contract or a term thereof or their legal or practical effect were accurately explained by any person, to the party seeking relief under this Act;

(j) the conduct of the parties to the contract in relation to similar contracts or courses of dealing to which any of them had been party; or

(k) whether a party relied on the skill, care or advice of the other party or a person connected with the other party in entering into the contract."



Unfair (Procedural and Substantive) Terms in Contract Back




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