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Report No. 199

Section 15: Act to apply to executed contracts

Another important aspect of the Bill is whether the unfairness provisions, both procedural and substantive, must apply not only at the stage the implementation of the contract but also at any later stage when the contract is either partly or fully executed. The benefit of relief from unfairness must, therefore, extended upto the execution of the contract, either in part or in full but this is naturally subject to a rider that the Court "may" grant relief on the basis of sections 5, 6, 9 to 14 and for that purpose,

"it may consider whether and to what extent restitution is possible in the facts and circumstances of the case and where such restitution is not possible either wholly or partly, whether any compensation is payable."

Such a provision applying the provisions of an unfair term of contract law to executed contracts is available under section 14 of the Contract Review Act, 1980 of New South Wales (Australia). However, we have put some qualifications which are not found in that Act, which are underlined as above.

Section 16: Court's power to raise an issue of unfairness of a contract or term thereof.

We have felt it necessary to confer power on the Court, i.e. civil court, consumer fora and also the tribunal, to raise an issue of unfairness on its own under sections 5, 9 to 12 even if none of the parties has raised it in his or its pleadings. There is such a provision recommended by the UK and Scottish Law Commission and is contained in section 21 of the Draft Bill, 2004 prepared by them.

Unfair (Procedural and Substantive) Terms in Contract Back

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