Model contracts aim to make joint agreements between suppliers and consumers more efficient and cost-effective. 3 min read Section 3 of the Unfair Contract Terms Act 1977 limits the ability of the author of consumer contracts or model contracts to draft terms that would allow him to exclude liability in a so-called exclusion clause – the law does not in itself make ineffective provisions in other areas that seem “unfair” to the layman. If a contract is negotiated, the provisions of the law probably wouldn`t apply – the law protects against many things, but openly making a bad deal is not one of them. In an introductory book such as this, it is neither possible nor appropriate to attempt even a general overview of the law and practice of model contracts. However, it is important for students to become familiar with some of the contexts in which they work. In the remainder of this chapter, examples of construction and engineering contracts will be discussed in more detail. The prevalence of model contracts is so great that courts are regularly asked to interpret them. For example, a dispute between the parties to a standard contract may require the court to establish the true meaning of a single clause, the relationship between two printed clauses, or the position of a printed clause and a written addendum. This may include whether or not a clause can be included in the contract, or the extent of a disclaimer or limitation of liability. The main reason for the widespread use of standard contractual forms is the need to facilitate the conduct of trade in the most efficient manner. Model contracts often include many pages with detailed clauses and individual clauses of more than one page. There are undoubtedly thousands of such contracts that are in use at all times. Model agreements are often useful because the parties regularly conclude complex technical and legal relationships.
This is the case, for example, in the construction industry, in international trade and in mechanical engineering. In other cases, this is because the transactions in question are transactions related to standardized and mass-produced products, services or marketing techniques. The latter is a particularly common feature of modern businesses. In such cases, the existence of a standard contract means that standard terms do not have to be renegotiated for each transaction. The classic contractual model developed at a time when most negotiations were conducted personally by two parties. The doctrines associated with this model and its neoclassical ramification continue to dominate the modern development of contract law, although a significant number of legal agreements are now model contracts that contain express written terms prepared prior to negotiation and exchange by parties other than the contracting parties. Model contracts are likely to constitute the majority of contracts currently concluded under commercial and consumer agreements. Most parking tickets, theater tickets, package receipts, debit card purchase receipts are standard contracts. Although the Unfair Contract Terms Act 1977 recognizes the existence of “standard written forms of business”, there is no legal definition of a standard contract in this country. However, all model contracts have certain characteristics. They have conditions that are set out in advance by or on behalf of the person providing or purchasing the goods or services.
The intention is that the same contract will be used in several transactions, with people who have not always been identified at the time of the development of the terms. For a contract to be treated as a membership contract, it must be presented on a standard “Take it or Leave It” form and not give a party the ability to negotiate due to its unequal negotiating position. Special examination of membership contracts can be carried out in several ways: in the construction sector, there are a number of model contracts, subcontracts, guarantees and appointment agreements published by organizations such as the Joint Contracts Tribunal (JCT), the Royal Institute of British Architects (RIBA), the Institution of Civil Engineers (ICE), etc. Such agreements may be useful because they are used between the parties and their exact meaning has been examined by case law. Companies that sell goods or services in large quantities can use standard contracts. They are especially useful for large software companies that sell thousands of copies of their products worldwide every day. Nevertheless, even if consumers had time to read the model contracts, they would probably not understand them. And even if they understood them, they would probably have no choice but to “take them or leave them,” as Lord Diplock suggested. When was the last time you renegotiated the terms of a standard contract with a major airline or online bookseller? One approach to this problem would be to reject assumptions about roughly equal bargaining power of classical or neoclassical theorists by promoting legal and legal paraphrases of contracts. Another would be to try to create the negotiating autonomy expected by traditionalists and work towards greater consumer awareness of contracts.
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