Explain the key features of the Standard form of Contracts.
The standard form of a contract, also known as a standardized contract or boilerplate contract, refers to a pre-drafted agreement that contains standardized terms and conditions that are not typically negotiated between the parties.
Key features of standard form contracts include:
- Non-Negotiability: The terms and conditions are predetermined by one party and are not subject to significant negotiation. The other party can usually only accept or reject the entire contract as presented.
- Standardized Language: These contracts often use standardized language that remains consistent across multiple contracts of the same type.
- Efficiency: Standard form contracts can streamline transactions by eliminating the need to negotiate every time. This can save time and resources, especially in industries where frequent, repetitive transactions occur.
- Risk Allocation: The terms in these contracts are typically drafted to minimize the legal and financial risk for the party that drafted the contract.
- Lack of Individual Tailoring: Standard form of contracts may not address specific circumstances or individual needs of the parties involved, which can sometimes lead to unfair or inequitable outcomes.
- Enforceability: The enforceability of standard form contracts can vary depending on jurisdiction and the specific terms involved. Courts may scrutinize these contracts more closely in cases where there is a significant imbalance of power between the parties or if certain terms are found to be unconscionable or illegal.