10 Correcting inequality of bargaining power

The classical grounds for avoidance deal with some simple cases of lack of bargaining power, for example when one party takes advantage of the other party's urgent needs and lack of choice to extort an unfairly high price for goods or services.1. But modern conditions, and particularly the use of standard contract terms, lead to new forms of inequality that need to be addressed. A party who is offered a standard form contract and who knows what it contains and understands its meaning, and is unhappy with the terms offered, may find that it is impossible to get the other party, or any other possible contracting party, to offer better terms: the party may be told to ‘take it or leave it.’ Such problems are most common when a consumer is dealing with a business, but can also occur in contracts between businesses, particularly when one party is a small business that lacks bargaining power. The provisions on unfair terms are thus also based on notions of preserving freedom of contract, but — just as in the existing EC law — in a more extended sense than in classical law. The laws of some Member States apply these provisions to contracts of all types, not just to contracts between businesses and consumers. Again the DCFR takes a balanced view, suggesting a cautious extension beyond the existing acquis.