Unconscionability In Contract Law: A Doctrine In Contract Law
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Unconscionability is a doctrine in contract law that describes terms that are so extremely unjust, or moreover one-sided in favor of the party who has the superior bargaining power, that they are contrary to good conscience.
Thus, it is determined by examining the circumstances of the parties when the contract was made, such as their bargaining power, age, and mental capacity. Other issues might include lack of choice, superior knowledge, and other obligations or circumstances surrounding the bargaining process.
Unconscionable conduct is also found in acts of fraud and deceit, where the deliberate misrepresentation of fact deprives someone of a valuable possession. When a party takes unconscionable…show more content… Fundamental Error: There may be some usual external evidence of consent, but the apparent consent may have been given under the mistake, which the party is not precluded from showing and which is so complete as to prevent the formation of real agreement “upon the same thing”. Such are known as fundamental error.
According to Section 14 when the consent is said to be free when is is not cause by:
1. Coercion as defined in Section 15, or
2. Undue influence as defined in Section 16, or
3. Fraud as defined in Section 17, or
4. Misinterpretation as defined in Section 18, or
5. Mistake are subject to provision to sections 20, 21 and 22
The prepositions which may define unconscionability under the following:
1. Consent induced from external force – which is defined in Sections 15, 16, 17 and 18
2. If mistake was made, it can be defined in unilateral, bilateral and multilateral mistake in Sections 20, 21, 22 .
3. Adhesion Contract is defined in unequal position when the one party is bound to enter into the contract due to bargaining conditions defined by the employer. Such type of contracts is not bargained on conditions. Example: Form employment.
Defining the external sources of…show more content… The transaction is said to be unconscionable as the transaction is held in “undue influence” of the dominating party.
3. Fraud : Defined in the Section 17 of the Indian contract Act, It can be defined as the act or omission which in the law may be declared as fraudulent or a false promise by the party to perform his duty. The fraud is committed wherever one man causes another to act on a false belief by a representation which he himself doesn’t believe to be true or the promise was made without any intention of performing it. It may also be sometimes be a complete misunderstanding on the part of the person deceived as to nature of transaction undertaken. In England, Buying goods with the intention of not paying the price is a fraud which entitles the seller to rescind the contract . In India, borrowing money with no intention of repaying back it is a cheating and punishable under the Indian Penal Code 1860 but mere delay in paying the money back due on building contract cannot be considered to be fraud