Legal Theory and Raison D’etre Behind the Use Of Unfair Contract Terms

  • Farihana Abdul Razak Universiti Teknologi MARA, Perak Branch, Malaysia
  • Zuhairah Ariff Abd Ghadas Universiti Sultan Zainal Abidin, Malaysia
  • Norhasliza Ghapa Universiti Sultan Zainal Abidin, Malaysia


This article discussed unfair contract terms, explores the relevant legal theories that underpin the use of unfair contract terms and examines the raison d’etre for using unfair terms in a contract. The qualitative and doctrinal legal research methods were used in this study. Data were obtained through documentation techniques, which included examining and analyzing several journals, books, and other related documents. Based on library research and content analysis of primary and secondary data sources, the findings indicated that the theory put forward by legal philosophers is to ensure that law and society can be balanced. The use of standard form contracts increases the implementation of unfair contract terms; nonetheless, this study found there is raison d’etre in using unfair terms, particularly in the event of safety, security, government regulatory, operational, and health concerns. Therefore, it is hoped that the study will contribute to a knowledge of contract law.


Abbasi, V., & Marzieh, K. (2017). Law Part of the Framework for Accountability in Policy Interpretation and Practice. Jurnal Ilmiah Peuradeun, 5(1), 91-100. doi:10.26811/peuradeun.v5i1.122
Abdullah, F., & Shaik Ahmad Yusoff, S. (2018). Consumer Protection on Unfair Contract Terms: Legal Analysis of Exemption Clauses in B2C Transactions in Malaysia. International Journal of Asian Social Science, 8(12), 1097–1106.
Abu Bakar, E., & Amin, N. (2016). Consumers’ Awareness and Practices Towards ‘Exclusion Clause’ and its Position under Malaysian Law. Malaysian Journal of Consumer and Family Economics, 19, 15–26.
ACCC. (n.d.). Determining Whether a Contract Term is Unfair. Retrieved 30 March 2021, from Australian Competition & Consumer Commission website:
Al-Tawil, T. (2012). On the Topic of the Divergence between Legal and Moral Obligations in Common Law. Canadian Journal of Law and Jurisprudence, 25(1), 5–37.
Alexandra, S. (2013). Unfair Contract Terms: A New Dawn in Australia and New Zealand? Monash University Law Review, 39(3), 739.
Amin, N. (2013). Protecting Consumers Against Unfair Contract Terms in Malaysia: The Consumer Protection (Amendment) Act 2010. Malayan Law Journal Articles, 1(ixxxix), 1–11.
Bayles, M. D. (1983). Introduction: The Purposes of Contract Law. Valparaiso University Law Review, 17(4), 613–626.
Beatson, J., Burrows, A., & Cartwright, J. (2016). Anson’s Law of Contract (31st ed.). United States of America: Oxford University Press.
Bishop, J. D. (1995). Adam Smith’s Invisible Hands Argument. Journal of Business Ethics, 14(3), 165–180.
Brand, F. D. J. (2009). The role of good faith, equity, and fairness in the South African law of contract: the influence of the common law and the Constitution. The South African Law Journal, 126, 71.
Burton, S. J. (1980). Breach of Contract and the Common Law Duty to Perform in Good Faith. Harvard Law Review, 94(2), 369–404.
Choi, A., & Triantis, G. G. (2012). The Effect of Bargaining Power on Contract Design. In Law and Legal Theory Working Paper Series 2012-04.
Chynoweth, P. (2008). Legal research. In A. Knight & L. Ruddock (Eds.), Advanced Research Methods in the Built Environment (Vol. 1).
Contreras, J. L. (2015). A Market Reliance Theory for Frand Commitments and Other Patent Pledges. UTAH Law Review, (2).
Cotterrell, R. (1997). Law’s Community: Legal Theory in Sociological Perspective. New York: Oxford University Press.
Dimatteo, L. A., & Sacasas, R. (1995). Credit and Value Comfort Instruments: Crossing the Line from Assurance to Legally Significant Reliance and toward a Theory of Enforceability. Baylor Law Review, 47(2), 357.
Giancaspro, M. (2019). Testing the Boundaries of the Consideration Doctrine: Can You Contract to Buy and Sell a Ghost? Alternative Law Journal.
Gordon, J. D. (1990). Dialogue About the Doctrine of Consideration. Cornell Law Review, 75(5), 986–1006.
Inequality of Bargaining Power as an Occasion for the Non-Enforcement of Bargains in Which the Consideration Is Inadequate. (1927). Columbia Law Review, 27(4), 430.
Irakli, T. (2017). The Principle of Freedom of Contract, Pre-Contractual Obligations Legal Review English, EU and US Law. European Scientific Journal, ESJ, 13(4), 62.
Jaffey, P. (1998). A New Version of the Reliance Theory. Northern Ireland Legal Quartely, 49, 107.
K. Ilobinso, I. (2018). Protecting Consumers in the Online Market from Unfair Contract Terms: the Nigerian Perspective. Nigerian Journal of Comtemporary Law, 14(1), 51–68. 2018
Klappstein, V. (2014). The Obligation to Contract in British Law. Journal of Governance and Regulation, 3(2), 50–64.
Kronman, A. T. (1981). Review: A New Champion for the Will Theory. The Yale Law Journal, 91(2), 404–423.
Levin, J., & Mcdowell, B. (1983). The Balance Theory of Contracts: Seeking Justice in Voluntary Obligations. McGill Law Journal, 29.
Lorenzen, E. G. (1919). Causa and Consideration in the Law of Contracts. Yale Law Journal, XXVIII(7), 621–646.
Mahmood, N. R. (1993). Unfair Terms in Malaysian Consumer Contracts - The Need for Increased Judicial Creativity. Asian Seminar on Consumer Law, (August), 446. Kuala Lumpur, Malaysia.
Mallet, P., & Flayyih, N. T. (2020). Information Management for the Fate of the Limitation of Liability Clauses After the Termination of the Contract in French Law. International Journal of Supply Chain Management, 9(5), 415–419.
Mallor, J. P. (1986). Unconscionability in Contracts between Merchants. Southwestern Law Journal, 40(4), 1065.
May Fong, C. (2009). The Malaysian Contracts Act 1950: Some Legislative and Judicial Developments Towards a Modern Law of Contract. Jurnal Undang-Undang, (36), 53–81.
Muttaqin Mansur, T., Sulaiman, & Ali, H. (2020). Adat Court in Aceh, Indonesia: a Review of Law. Jurnal Ilmiiah Peuradeun, 8(2), 423–442.
Rod, S. (2018). Major Changes needed to get rid of Unfair Contract Terms. COSBOA National Small Business Summit. Australia.
Rosenfeld, M. (1985). Contract and Justice: The Relation Between Classical Contract Law and Social Contract Theory. Iowa Law Review, 70, 769.
Trakic, A. (2016). The Inequality of Bargaining Power: Does Malaysia Need This Doctrine? Australian Journal of Asian Law, 17(1), 1–19.
Vibhute, K., & Aynalem, F. (2009). Legal Research Methods.
Webley, L. (2010). Qualitative Approaches to Empirical Legal Research. In P. Cane & H. Kritzer (Eds.), The Oxford Handbook of Empirical Legal Research.
Yasmin, M. (2016). Legal Liability in Standard Form of Contract. International Research Journal of Engineering, IT & Scientific Research, 2(9), 39–45.
Yusup, D. (2019). Multi Contract as A Legal Justification of Islamic Economic Law for Gold Mortgage Agreement in Islamic Bank. Jurnal Ilmiah Peuradeun, 7(1), 1-20. doi:10.26811/peuradeun.v7i1.318
Zulhafiz, W. M., & Rahman, N. A. (2020). Unfair Risk Allocation in Oil and Gas Upstream Service Contracts in Malaysia: The Necessity for Oilfield Anti-Indemnity Act. International Journal of Business and Society, 21(S1), 177–191.
How to Cite
RAZAK, Farihana Abdul; ABD GHADAS, Zuhairah Ariff; GHAPA, Norhasliza. Legal Theory and Raison D’etre Behind the Use Of Unfair Contract Terms. Jurnal Ilmiah Peuradeun, [S.l.], v. 9, n. 3, p. 623-638, sep. 2021. ISSN 2443-2067. Available at: <>. Date accessed: 29 nov. 2021. doi: