Government To Clamp Down One-sided Contracts
Under the present laws, the contracts are unilateral and there is no protection against unfair contracts. Often, service providers want consumers to sign on the dotted line even if the terms and conditions are stiff and give little leeway to consumers. The government is set to revamp the Consumer Protection Act, 1986 to provide for acting against unfair terms in contracts which are skewed heavily in favor of service providers or manufacturers.
Soon, telecom operator, bank or real estate developer may not be able to get away with one-sided contracts. Nearly five years ago, the Law Commission had said that in view of the need to protect consumers and particularly to grant protection from the disadvantages of extensive introduction of standard terms of contracts which are one-sided, it has become necessary to evolve general principles regulating unfairness in contracts.
It had cited new laws in developed countries and said these legislations on unfairness contained several important provisions intended to protect the weaker party against the stronger. The Law Commission had characterized unfair terms in contracts into three categories “procedurally unfair, substantively unfair and voidable”-which should be avoided.
In recent years, the consumer movement has gathered pace in the country and consumer courts have seen a steady increase in the number of cases. Government officials said there was a need to further strengthen consumer protection laws in the country in order to keep pace with the changing economic scenario and the need to educate and protect consumers against unfair trade practices and contracts.
Work is underway on the issue and we hope to bring the changes for debate soon,” a senior government official said.
According to the Law Commission report, it has become necessary to provide additional provisions in India for redressal against unfair terms of contracts, apart from the existing provisions contained in the Indian Contract Act and Specific Relief Act.
It had said that business and commerce in the country will be put to serious disadvantage if a new law regulating unfair terms of contract is not in place. The panel had rejected the argument that such a law will affect foreign investment in the country and had cited such laws already in place in countries such as the UK, the US, Canada, Australia and New Zealand.
Consumer Court, Consumer Protection Act, Law Commission, One-sided Contracts, protect the weaker party against the stronger, protection against unfair contracts, Real Estate Developers, Service providers or manufacturers, Unilateral contracts
