Unequal Bargaining Power Agreement

“The real measure of market power is not whether a supplier presents its terms on the basis of Take-it-or-leave, but whether the consumer, if he decides to leave it, has a viable competitive supply of alternative sources of supply. Whether this is so or not, it cannot intuitively be inferred that a particular supplier offers non-negotiable standard terms. This is an independent investigation. Where the market is competitive, any supplier offering non-competitive standard conditions must reformulate its set of price and non-price conditions in order to prevent consumers (at least marginal consumers who are the most important in such a market) from converting their activities to other competitors. Keywords: inequality, bargaining power, contracts, abusive enrichment, merger, justice, rights Standard forms for consumer contracts are often included in a printed post, notification or receipt made forehand to the consumer at the time of conclusion of the contract and which a prudent consumer would read from start to finish. In fact, the consumer has neither the time nor the energy to do so, and even if that were to happen, it would hardly help the consumer not to vary the conditions in any way. It is only in the event of a dispute that the consumer realizes how few rights there are in contracts. Consumers and investors conclude standard contracts for financial products and financial services on a daily basis. Home loan, credit card, and customer or brokerage contracts, for example, are almost certainly standard contracts.

It is certainly more convenient to conclude contracts on standard pre-printed forms rather than to negotiate on an individual basis. The use of standard contracts reduces the time allotted to suppliers for supply and to consumers for the purchase of goods or services. and thus facilitates the speed and variety of mass production and consumption. In addition, model contracts have the effect of reducing transaction costs for suppliers who may otherwise be passed on to consumers. The spread of e-commerce has led to an increased use of model contracts, as individual negotiations do not seem feasible for consumers` online sales. The concept of unequal bargaining power has long been recognised, particularly with regard to workers. In the wealth of nations, Adam Smith wrote that inequality of bargaining power in law, economics, and the social sciences refers to a situation where one party to a negotiation (bargaining power), treaty, or agreement has more and better alternatives than the other party. As a result, one party has more power than the other to vote against the deal and makes it more likely that party will get more favourable terms and give them more bargaining power (since it is better placed to refuse the deal). It is generally accepted that unequal bargaining power infringes on freedom of contract, resulting in a disproportionate degree of freedom between the parties and that it is a place where markets fail. “It is now easy to realize that in 1906 Parliament may have felt that the only way to give labour equal bargaining power with capital was to grant it special immunities that customary law does not allow. Even now that the balance has been corrected, it is easy to see that Parliament might think that a strike, reprehensible or not, should not be a cause for litigation and that labour peace should be sought by other means.

Where bargaining power remains unequal, the concept of unequal bargaining power serves as justification for the implicit mandatory conditions in treaties by law or the non-application of a contract by the courts. If the unemployed crowd around the factory doors every morning, it is clear to every man that his chance to earn a living for the coming weeks can be irretrievably lost if he cannot get the foreman to choose him and not another. .