STANDARD FORM CONTRACTS

DOIhttp://doi.org/10.1111/j.1468-2230.1953.tb02125.x
AuthorH. B. Sales
Publication Date01 Jul 1953
STANDARD FORM CONTRACTS
THE
increasing use of standard form contracts is
a
subject which
concerns everybody much more than is commonly realised and one
to which lawyers have paid only casual attention. Neither the
expression
standard form contract nor any variant of
it
has
acquired the status of
a
term of art
or,
indeed, any recognised and
distinctive meaning
:
it
is,
therefore, as well
to
define what is meant
by the expression in this article. The words “standard form
contract
will be used to include every contract, whether simple or
under seal and whether contained in one
or
more documents, one
of the parties to which habitually makes contracts of the same type
in a particular form and will allow little, if any, variation from that
form. The average man, the man in the street
or
on the Clapham
omnibus, is continually making such contracts and the probability
is that they are the most important contracts that he ever makes.
If
he rents his house from the local authority
or
the owner of an
estate his tenancy agreement will be in a standard form; he will
have been supplied with gas and electricity only if he has signed a
printed form of agreement; any item
of
furniture which he has
bought on the hire-purchase system will be the subject of an agree-
ment designed by a finance company; his wireless set, his motor-car
and most of his electrical equipment will have been sold to him
subject to standard terms. His work,
if
he is a manual worker in
a large undertaking,
a
civil servant,’ a local government officer
or
an employee of a big organisation, will almost certainly be based
upon a contract of service, the conditions of which are set out in
a
printed document. His journey to and from work will be the
subject of a contract
of
carriage on abstruse but unalterable
conditions, and at least one of his leisure time activities, his
football “pools,” will be carried on subject to the most rigid
regulations
.’
In all these transactions the bargaining power of the parties is
unequal
:
on the one side there is the ordinary individual and on the
other a monopoly
or
powerful organisation with desirable goods
or
services to supply. The choice between not making
a
contract
or
making it on the
only
terms available is no choice at all and docile
submission to the standard form, meek signature
on the dotted
line,” is the general rule. The method
of
creation
of
this type of
I
Cf.
Rodwell
v.
Thomas [1914]
1
All
E.R.
700.
2
Such
regulations
will,
however,
be binding
I’
in
honour
only
and
a
clause
even
stronger than
that
used
in
Rose
and
Frank
v.
Crotnpton
Uros.
(119251
A.C.
445)
will
bar
any
approach
to
the
courts:
Appleson
V.
H.
I,iillewood.
Ltd.
[I9391
1
All
E.R.
464.
31
8
JULY
1953
STANDARD
FORM
CONTRACTS
819
contract is well conveyed by the expression, originated by Saleilles,’
contrats d’adh6sion. The potential customer has the choice either to
adhere to the standard form
or
not and the printed document which
sets
out the standard conditions will never see the red, green and
purple ink beloved of the conveyancer when negotiating his terms.
Other transactions take place on standard forms of contract
where the bargaining power of the parties is more equal.
This
is
especially the case in what may be called commercial contracts,
that is, contracts between parties both of whom are engaged in
trade, business or commerce.
Standard form contracts have a long history in various fields
of
commerce, particularly in that of shipping. Charter parties and bills
of lading are still based on ancient forms and even the complicated
marine insurance policy has changed little during the centuries.
The problems arising from the use of such documents are mainly
problems of construction and, in seeking to find a solution,
the
lawyer has the benefit of the many decisions interpreting nearly
every phrase that is used in the traditional forms. The problems
which are discussed in this article arise comparatively rarely.
In other fields of commerce the use of standard form contracts
is
a new phenomenon and there is a general tendency
for
more and
more contracts to be embodied in elaborate printed documents
where previously they were made in a simple form, the parties
relying on the common law and statutes, such as the Sale of Goods
Act,
1893,
to establish their rights and liabilities. The more that
monopolies and combines extend their activities the less bargaining
power remains and there may be just as much inequality between
a small trader and a large combine as there
is
between a railway
company and a passenger.‘
It is, however, mainly with transactions between private indivi-
duals and large organisations that this article is concerned.
The position of standard
form
contracts under the common law
can be summarised in a series of divisions
of
possibilities. These all
assume the absence of duress, fraud or misrepresentation. They are
best expressed numerically
:-
1.
A
person who accepted an
offer
which
is
based on standard
conditions, the terms of which were all specifically brought to his
notice, is bound by these conditions, even
if
he expressed his
objections to them.5
2.
If
a person accepted an
offer
made subject to standard conditions,
but was unaware of their contents, the first question to ask is
whether he signed the form containing the conditions
or
not
:-
J
De
la
Declaration
de
Volotrtd,
1901.
4
Cf.
Palmoliue
Co.
v.
Freedman
[I9281
Ch.
264.
5
Walker
v.
York
and
North
Midland
Ry.
(1853)
2
E:.
B
B.
750;
Eric
Gnapp,
Ltd.
v.
Petroleum
Board
[I9491
1
All
E.R.
980.

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