A standard form contract, also known as a boilerplate contract, is a pre-drafted agreement that is used repeatedly for similar transactions. It is commonly used in various industries such as real estate, insurance, and banking. These contracts are often drafted by one party, usually the party with greater bargaining power, and presented to the other party on a take-it-or-leave-it basis.
In law, a standard form contract is defined as a contract where the terms and conditions are predetermined and non-negotiable. These contracts are usually lengthy, filled with legal jargon, and presented in small font sizes. Since the terms are non-negotiable, the signing party has little or no input in the final terms of the contract.
Standard form contracts are widely used in consumer contracts. For instance, when you sign up for a new credit card, the issuer usually presents you with a pre-drafted contract with terms and conditions. The terms in these contracts are often one-sided and favor the issuer, making it difficult for the cardholder to challenge any dispute.
However, standard form contracts are not necessarily seen as unfair or unenforceable in the law. As long as the terms are not contrary to law, public policy or good morals, and both parties entered into the contract voluntarily, the contract will be upheld by courts.
However, in some instances, a party may argue that the contract terms were unfair and seek to have them set aside. This argument is often successful where the party can show that the other party has greater bargaining power, the terms were not properly brought to their attention, or that they were pressured into signing the contract.
To avoid disputes arising from standard form contracts, it is best to read and understand the terms and conditions before signing. If you do not understand any terms, seek legal advice before entering into the agreement.
In conclusion, standard form contracts are pre-drafted agreements where the terms and conditions are predetermined and non-negotiable. They are commonly used in various industries, and while they may seem unfair or one-sided, they are enforceable as long as the terms do not violate any laws or public policies. It is important to read and understand the terms before signing and seek legal advice if necessary.