Many businesses use ready-made contracts, called standard form contracts, to save time and money. These contracts have fixed terms and conditions that apply to everyone and there is no negotiating. Banks and insurance companies use them to handle lots of transactions quickly.
But here’s the catch: these contracts often have fine print that can be tricky, like clauses that let companies dodge responsibility. For example, that little note on your laundry receipt saying, “Not responsible for lost or damaged clothes”. Most of us don’t read these contracts, and even if we do, we can’t change anything. The bad news? You only find out your rights are limited when something goes wrong. The good news? Courts don’t always enforce unfair terms because they know consumers don’t really have a choice.
In this article, we’ll break down how courts deal with these sneaky clauses. We’ll explore why clear communication matters and what it means for businesses and customers.
Courts consider different factors to decide if a company did enough to inform consumers about important contract terms. The goal? To keep things fair, clear, and transparent. Here’s what they look at:
Can You See It? Making Exclusion Clauses Clear and Fair: Visibility matters. If a company hides their exclusion clauses, like printing them on the back of a ticket without a clear note on the front (“See back for conditions”), courts often say that’s not fair notice. The same goes for conditions that are hard to read, like smudged, faded, or super tiny print. If people can’t easily see or understand the terms, the courts usually won’t enforce them.
Beware of unusually Broad or non-traditional exclusion clauses: These clauses are a no-no unless they’re clearly explained to the customer. If a company tries to add something that’s way outside the norm or not what you’d expect, they need to make it very obvious. If they don’t take extra steps to point out these big changes, courts usually say the clause wasn’t properly shared with the customer and won’t enforce it.
Giving Clear Notice Before Signing a Contract: Notice has to be given before or when the contract is made and not after. This is to make sure both sides understand the deal before agreeing. If a company adds terms after the contract is done, it doesn’t count. Once a contract is finalized, it’s legally binding, and one side can’t just change it without the other agreeing.
Documents that count as contracts: Courts also check if the document with the exclusion clause looks like it’s meant to be part of a contract. It should be something a reasonable person would expect in a contract. The courts won’t enforce exclusion clauses hidden in documents like receipts, vouchers or tickets, that don’t clearly seem like part of a contract.
Clear language: The company must make sure the clause is written clearly and is easy to understand. If the wording is confusing or unclear, it will be interpreted in the way that benefits the consumer. This rule makes sure companies can’t use tricky or confusing language to avoid responsibility.
Exclusion Clauses and Third Parties: Sometimes, companies try to use exclusion clauses to protect people who aren’t directly part of the contract, like their employees or agents. For example, they might say, “We’re not responsible for any mistakes made by our employees or agents.”
However, in Ghana, the law (section 5 of the Contracts Act, 1960) says that third parties, like employees, can’t hide behind these clauses. This means employees or agents are still responsible for their actions, even if the company tries to shield them.
Standard form contracts are common in business but can be tricky for consumers, often containing exclusion clauses that limit rights. Courts review these clauses carefully to prevent unfairness.
Consumers should read contracts closely, ask questions, and try to negotiate unclear terms. Companies can avoid issues by using clear language, making exclusion clauses obvious, and being fair and transparent.
Alhassan Aboagye on behalf of OSD and Partners. [email protected]
