Report on Proposals for Unfair Contracts Relief
British Columbia Law Institute Report No. 60
75 Pages Posted: 7 Oct 2011
Date Written: September 28, 2011
The basic purpose of the law of contracts is to ensure that promises made for consideration are enforced. Achieving this basic purpose offends the conscience of society in some cases. The courts have a longstanding jurisdiction to refuse to enforce contracts that are determined to be unfair.
This report recommends reforms to the leading concepts used by contract law to tackle the problem of unfairness. These concepts are unconscionability, duress, undue influence, good faith, and misrepresentation. Over the past years, they have been considered in an increasing number of court decisions. This has led to an expansion of, and a degree of confusion about, their scope. It is now timely to rationalize and consolidate these concepts.
This report presents its recommendations in the form of draft legislation, called the Contract Fairness Act. The Contract Fairness Act clarifies vexing ambiguities in the application of unconscionability, duress, and undue influence, creates a framework to integrate those concepts, includes a definition of “good faith,” provides for a duty of good faith in the performance of contracts, and addresses concerns about remedies for misrepresentation.
Keywords: contract, unconscionability, duress, undue influence, good faith, misrepresentation, exclusion clause, unfair contract, Contract Fairness Act, remedies, consumer protection, consumer financial & debt, inequality of bargaining power, general principles of contract law
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