Contract Law
Part of the common law series
Contract theory
Contract formation
Offer and acceptance  · Mailbox rule
Mirror image rule  · Invitation to treat
Consideration
Defenses against formation
Lack of capacity to contract
Duress  · Undue influence
Illusory promise  · Statute of frauds
Non est factum
Contract interpretation
Parol evidence rule
Contract of adhesion
Integration clause
Contra proferentem
Excuses for non-performance
Mistake  · Misrepresentation
Frustration of purpose  · Impossibility
Unclean hands  · Unconscionability
Illegality  · Accord and satisfaction
Rights of third parties
Privity of contract
Assignment  · Delegation
Novation  · Third party beneficiary
Breach of contract
Anticipatory repudiation  · Cover
Exclusion clause
Fundamental breach
Remedies
Specific performance
Liquidated damages
Penal damages  · Rescission
Quasi-contractual obligations
Promissory estoppel
Quantum meruit
Subsets: Conflict of law Commercial law
Other areas of the common law
Tort law  · Property law
Wills and trusts
Criminal law  · Evidence

A standard form contract (sometimes referred to as an adhesion contract or boilerplate contract) is a contract between two parties that does not allow for negotiation, i.e. take it or leave it. It is often a contract that is entered into between unequal bargaining partners, such as when an individual is given a contract by the salesperson of a multinational corporation. The consumer is in no position to negotiate the standard terms of such contracts and the company's representative often does not have the authority to do so. Image File history File links Scale_of_justice. ... A contract is a promise or an agreement made of a set of promises. ... This article concerns the common-law legal system, as contrasted with the civil law legal system; for other meanings of the term, within the field of law, see common law (disambiguation). ... Contract theory comprises many different theories and various interpretations of the various body of rules and subrules that define Contract Law. ... Offer and acceptance analysis is a traditional approach in contract law used to determine whether an agreement exists between two parties. ... The mailbox rule or the postal acceptance rule is a term of common law contracts which determines when a contract has been formed where the parties are communicating via the mail. ... In the law of contracts, the mirror image rule states that an offer must be accepted exactly without modifications. ... In contract law, an invitation to treat (invitation to bargain in the US) is an action by one party which may appear to be a contractual offer but which is actually inviting others to make an offer of their own. ... It has been suggested that this article or section be merged with Consideration under English law. ... The capacity of both natural and artificial persons determines whether they may make binding amendments to their rights, duties and obligations, such as getting married or merging, entering into contracts, making gifts, or writing a valid will. ... Duress in the context of contract law is a common law defence, and if you are successful in proving that the contract is vitiated by duress, you can rescind the contract, since it is then voidable. ... Undue influence (as a term in jurisprudence) is an equitable doctrine that involves one person taking advantage of a position of power over another person. ... In contract law, an illusory promise is one that courts will not enforce. ... The statute of frauds refers to a requirement in many common law jurisdictions that certain kinds of contracts, typically contractual obligations, be done in writing. ... This article or section does not cite its references or sources. ... This article or section does not cite its references or sources. ... An integration clause, in the contract law, is a term in the language of the contract that declares it to be the complete and final agreement between the parties. ... Contra preferendum or contra preferentem is the rule in contract law that is applied when interpreting a clause, especially an exclusion clause, in an action that says that, where ambiguity as to a terms meaning exists, it should be read against the party who wrote it. ... In contract law a mistake is incorrect understanding by one or more parties to a contract and may be used as grounds to invalidate the agreement. ... In contract law, a misrepresentation is a false statement of fact made by one party to another party and has the effect of inducing that party into the contract. ... Frustration of purpose is a term used in the law of contracts to describe a defense to an action for non-performance based on the occurance of an unforseen event which makes performance impossible or commercially impracticable. ... Impossible is also a name of a skateboarding trick. ... This article or section does not cite its references or sources. ... This article or section does not cite its references or sources. ... An illegal agreement, under the common law of contract, is one that the courts will not enforce because the purpose of the agreement is to achieve an illegal end. ... Accord and satisfaction is the purchase of the release from a debt obligation. ... The doctrine of privity in English law provides that a contract cannot confer rights or impose obligations arising under it on any person or agent except the parties to it. ... An assignment is a term used with similar meanings in the law of contracts and in the law of real estate. ... Delegation is a term used in the law of contracts to describe the act of giving another person the responsibility of carrying out the performance agreed to in a contract. ... Novation is a term used in contract law and business law to describe the act of either replacing an obligation to perform with a new obligation, or replacing a party to an agreement with a new party. ... A third party beneficiary, in the law of contracts, is a person who may have the right to sue on a contract, despite not having originally been a party to the contract. ... Breach of contract is a legal concept in which a binding agreement or bargained-for exchange is not honored by one of the parties to the contract by non-performance or interference with the other partys performance. ... Anticipatory repudiation (or anticipatory breach) is a term in the law of contracts that describes a declaration by one party (the promissing party) to a contract that they do not intend to live up to their obligations under the contract. ... Cover is a term used in the law of contracts to describe a remedy available to a merchant buyer who has received an anticipatory repudiation of a contract for the receipt of goods. ... An exclusion clause is a term in a contract that seeks to restrict the rights of the parties to the contract. ... Fundamental breach, sometimes known as a repudiatory breach, is a breach so fundamental that it permits the aggrieved party to terminate performance of the contract, in addition to entitling that party to sue for damages. ... Definition of Specific performance In the law of remedies, a specific performance is a demand of a party to perform a specific act. ... Liquidated damages is a term used in the law of contracts to describe a contractual term which establishes damages to be paid to one party if the other party should breach the contract. ... Penal damages are best seen as quantitatively excessive liquidated damages and are invalid under the common law. ... In contract law, rescission (to rescind or set aside a contract) refers to the cancellation of the contract between the parties. ... Estoppel is a concept that prevents a party from acting in a certain way because it is not equitable to do so. ... Quantum meruit is a Latin phrase meaning as much as he has deserved. In the context of contract law, it means something along the lines of reasonable value of services. Situations The concept of quantum meruit applies to the following situations: I. When a person employs (impliedly or expressly) another... International private law, private international law or conflict of laws is the branch of private law which regulates lawsuits involving foreign laws or jurisdictions. ... Commercial law or business law is the body of law which governs business and commerce and is often considered to be a branch of civil law and deals both with issues of private law and public law. ... In the common law, a tort is a civil wrong for which the law provides a remedy. ... Property law is the area of law that governs the various forms of ownership in real property (land as distinct from personal or movable possessions) and in personal property, within the common law legal system. ... In the common law, a will or testament is a document by which a person (the testator) regulates the rights of others over his property or family after death. ... The law of trusts and estates is generally considered the body of law which governs the management of personal affairs and the disposition of property of an individual in anticipation and the event of such persons incapacity or death, also known as the law of successions in civil law. ... Criminal law (also known as penal law) is the body of statutory and common law that deals with crime and the legal punishment of criminal offenses. ... The law of evidence governs the use of testimony (e. ... A contract is a promise or an agreement made of a set of promises. ... A multinational corporation (MNC) or multinational enterprise (MNE) or transnational corporation (TNC) or multinational organization (MNO) is a corporation or enterprise that manages production establishments or delivers services in at least two countries. ... Negotiation is the process where interested parties resolve disputes, agree upon courses of action, bargain for individual or collective advantage, and/or attempt to craft outcomes which serve their mutual interests. ...

Theoretical issues

There is some debate on a theoretical level whether, and to what extent, courts should enforce standard form contracts. On the one hand they undeniably fulfill an important efficiency role in society. Standard form contracting reduces transaction costs substantially by precluding the need for buyers and sellers of goods and services to negotiate the many details of a sale contract each time the product is sold. On the other hand, there is the potential for inefficient, and even unjust, terms to be accepted by those signing these contracts. Such terms might be seen as unjust if they allow the seller to avoid all liability or unilaterally modify terms or terminate the contract [1]. They might be inefficient if they place the risk of a negative outcome, such as defective manufacturing, on the buyer who is not in the best position to take precautions. There are a number of reasons why such terms might be accepted [2]: In economics and related disciplines, a transaction cost is a cost incurred in making an economic exchange. ...

• Standard form contracts are rarely read. Lengthy boilerplate terms are often in small print and written in complicated legal language which often seems irrelevant. The prospect of a buyer finding any useful information from reading such terms is correspondingly low. Even if such information is discovered the consumer is in no position to bargain as the contract is presented on a “take it or leave it” basis. Coupled with the often large amount of time needed to read the terms, the expected payoff from reading the contract is low and few people would be expected to read it.^{[citation needed]}
• Access to the full terms may be difficult or impossible before acceptance. Often the document being signed is not the full contract; the purchaser is told that the rest of the terms are in another location. This reduces the likelihood of the terms being read and in some situations, such as software end user license agreements, can only be read after they have been notionally accepted by purchasing the good.
• Boilerplate terms are not salient. The most important terms to purchasers of a good are generally the price and the quality, which are generally understood before the contract of adhesion is signed. Terms relating to events which have very small probabilities of occurring or which refer to particular statutes or legal rules do not seem important to the purchaser. This further lowers the chance of such terms being read and also means they are likely to be ignored even if they are read.
• There may be social pressure to sign. Standard form contracts are signed at a point when the main details of the transaction have either been negotiated or explained. Social pressure to conclude the bargain at that point may come from a number of sources. The salesperson may imply that the purchaser is being unreasonable if they read or question the terms, saying that they are ‘just something the lawyers want us to do’ or that they are wasting their time reading them. If the purchaser is at the front of a queue (for example at an airport car rental desk) there is additional pressure to sign quickly. Finally, if there has been negotiation over price or particular details then concessions given by the salesperson may be seen as a gift which socially obliges the purchaser to respond by being co-operative and concluding the transaction.
• Standard form contracts may exploit unequal power relations. If the good which is being sold using a contract of adhesion is one which is essential or very important for the purchaser to buy (such as a rental property or a needed medical item) then the purchaser might have no choice but to accept the terms. This problem may be mitigated if there are many suppliers of the good who can potentially offer different terms (see below).

Some contend that in a competitive market, consumers have the ability to shop around for the supplier who offers them the most favorable terms and are consequently able to avoid injustice. As noted, however, many people do not read or understand the terms so there might be very little incentive for a firm to offer favorable conditions as they would gain only a small amount of business from doing so. Even if this is the case, it is argued by some that only a small percentage of buyers need to actively read standard form contracts for it to be worthwhile for firms to offer better terms if that group is able to influence a larger number of people by affecting the firm’s reputation. Small print refers to the practice of including necessary legal terms or phrases in small writing on commercial or contractual documents. ... A software license is a type of proprietary or gratiuitious license as well as a memorandum of contract between a producer and a user of computer software — sometimes called an End User License Agreement (EULA) — that specifies the perimeters of the permission granted by the owner to the... giFT stands for giFT: Internet File Transfer. ...

Another factor which might mitigate the effects of competition on the content of contracts of adhesion is that, in practice, standard form contracts are usually drafted by lawyers instructed to construct them so as to minimize the firm’s liability and not by managers making competitive decisions. Sometimes the contracts are written by an industry body and distributed to firms in that industry, increasing homogeneity of the contracts and reducing consumer's ability to shop around.

External links

• Standard form contracts in the US
• Sample music industry contracts
• Joint Contracts Tribunal for United Kingdom Building Industry]