Consent Theory and Adhesion Contract: A Critical Analysis of Contemporary Global Business Practices

Abstract

Consent Theory mandates that both parties should have the right to negotiate terms and conditions of the contract on equal footings. At present, the ‘right to negotiate’ has been adversely affected by the introduction of Adhesion Contracts in almost all forms of online business and parts of the traditional business modes. This paper aims at critically analyzing jurisprudential tensions created by the Adhesion Contract to Consent Theory through application of analytical method. The authors argue that the Adhesion Contract tilts in favor of the dominant party. This paper further aims to examine the relevant case laws in Pakistan, relating to the enforcement of Adhesion Contracts and to assess the overall effectiveness of such clauses that renders the weaker party in exploitative state. Findings of the study suggests that courts should intervene to eradicate exploitation of the weaker party, by more markedly differentiating the legal treatment of unfair terms. Furthermore, Pakistani legislators must enact laws declaring such terms to be illegal.