Rarely will parties to a contract be in a position of equal bargaining power or entirely free from....?

Question

...undue influence. To allow a contract to be set aside on these bases would be to fail to deal with commercial realities. However, in extreme cases the courts can intervene, though the principles on which they can do so have not always been clearly laid down. Discuss.

-This is my assignment in "Intro to Law". So to any lawyers out there, can u guys help me...its just... i don't understand a thing...can u help me translate it in a much more simple words...PLEASE...its due on thursday.....Please.....

Answer 1

The basis of contract law is called "bargained-for exchange". That means both sides have at least some comparable bargaining power, and that both sides are able to walk away from the deal (rather than agreeing to it) if they don't like the terms.

There is also a concept called "unconscionability". It means that if one side really has no choice in a contract, or if the contract is so one-sided as to be completely unreasonable, then the contract is not enforceable.

For example, say there is only one grocery store within 100 miles. It's the only source to buy food. But the store requires anyone who purchases food there to sign a contract agreeing that the store owner can enter your house at any point. That's unfair. In fact, it's so unfair and so unreasonable that the court will not enforce it.

In this situation, the person had no bargaining power, and could not just walk away from the contract without starving.

But let's say there are three grocery stores. Two have comparable prices, and one is half the cost but includes the above house-entry clause. So, in this situation, you have the option of going to either of the other supermarkets, and not agreeing to allow entry into your house. You have options.

The bottom line is what you started off with -- rarely are two parties have exactly the same situation, and exactly the same ability to walk away from a deal. Usually one side needs it more than another, or has more options than the other. But as long as both have other options, as long as both enter into the agreement willingly (as opposed to under duress), then the contract is binding when both parties agree to the same terms.