Narendra Sharma

In some cases the standard form contracts have been struck down on the ground of absence of consensus ad idem, abroad as well as in India, as described below.


The presumption of undue influence may arise from the fact that there is such an inequality of bargaining power between the parties that one can cause economic duress to the other. The decision of the Court of Appeal in Lloyds Bank v. Bundy (1975) 1 QB 326. is a remarkable illustration of the concept of inequality of bargaining power.

“A  contractor borrowed a sum of money from a bank. He could not pay back in time. The banker pressed for payment or for security. He suggested that his father might mortgage the family’s only residential house. the bank officer visited the father and OBTAINED HIS SIGNATURES UPON READYMADE PAPERS. The contractor still could not pay and the banker sought to enforce the mortgage which might have meant throwing out of the family from its only residence. Accordingly, Mr Bundy relied upon the unfair character of the mortgage. HE WAS ALLOWED TO SET ASIDE THE MORTGAGE.”



The Bombay High Court in Road Transport Corpn Vs. Kirloskar Bros Ltd (AIR 1981 Bom 299) has said that it is for the carrier to plead and prove that the print on the receipt was brought to the notice of the consignor and that he had agreed to and accepted the same. The Court held that it is necessary that serious terms of a contract must be specifically brought to the notice of the parties whose rights are sought to be curtailed. In Oriental Fire and General Ins Co Vs. New Suraj Transport Co (AIR 1985 All 136) the consignment note was not even signed by the booking party or his agent, the Allahabad High Court held that the consignor was not bound by a printed term about the exclusive jurisdiction. THE COURT SAID THAT SOMETHING MORE MUST BE DONE THAN MERELY PRINTING THE TERMS ON CONSIGNMENT DOCUMENTS.

3. In Road Transport Organisation of India vs. Barunai Powerloom Weaver’s Coop Society Ltd ( 1994 84 Cal LT 174 ) the Calcutta High Court held that the law requires that before making a person bound by any such term (a clause in a consignment note as to exclusive jurisdiction) it must be proved that the same was brought to the knowledge of the consignor in such a way that IT SHOULD SEEM TO BE THE RESULT OF A MUTUAL ASSENT. In Grandhi Pitchaiah Venkatraju & Co vs. Palukuri Jagannadham & Co ( AIR 1975 AP 32 ) where a consignment way bill contained the words “subject to Calcutta jurisdiction”,  the Andhra Pradesh High Court ignored it since it was not one to which the plaintiff assented.  Following these principles in East India Transport Agency vs. National Insurance Co (AIR 1991 AP 53 FB) the Andhra Pradesh High Court came to the conclusion that a term as to the place of suit was not binding on the insurer who had paid out the consignee and who was then suing the carrier for the negligent loss of the goods UNLESS IT COULD BE PROVED THAT THE INSURER TOO WAS MADE OR WAS OTHERWISE AWARE OF THE TERMS.


A term in a contract of carriage requiring that NOTICE OF LOSS MUST BE GIVEN WITHIN 30 DAYS OF THE ARRIVAL OF THE GOODS has been held by the Supreme Court to be contrary to and defeating Section 10 of the Carriers Act, 1865, which prescribes a period of six months for the purpose. {(M. G. Bras v Prasad Textiles, (1983) 3 SCC 61.}

5. In V. Raghunadha Rao v State of A. P., (1988) 1 Andh. LT 461, it was held that – the clauses in question were an attempt to relieve the State of its liability and the court said that A STATE IS NOT FREE TO IMPOSE ARBITRARY OR UNJUST CLAUSES IN A PUBLIC CONTRACT.

Note: The views expressed are my personal and a view point only.

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