SC: A party can’t bind the other party by one-sided contractual terms

On 2ndApril 2019, The Hon’ble Supreme Court, in the matter of Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan pronounced that incorporation of one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986. Therefore, a party cannot seek to bind another party by one-sided contractual terms.

The Hon’ble Supreme Court observed that:

Section 2 (r) of the Consumer Protection Act, 1986 defines ‘unfair trade practices’ in the following words : “‘unfair trade practice’ means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice …”, and includes any of the practices enumerated therein. This provision is illustrative, and not exhaustive. (Para 6.6)

The incorporation of  one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling. (Para 6.7)

A party cannot seek to bind another party by one-sided contractual terms. (This inference has been drawn on the basis of Para 7)

Copy of judgement: Judgement_02-Apr-2019

-Tushar Kaushik

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