Unconscionability in the Law and Practice of Franchising
This study examined the operation of unconscionability in the law of franchising and the nature of existence of unconscionability in practice of franchising. Franchising is relatively a new branch of commercial law and practically opened to various forms of abuses by the franchisors and franchis...
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| Format: | Thesis |
| Language: | English English |
| Published: |
2008
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| Subjects: | |
| Online Access: | http://psasir.upm.edu.my/id/eprint/6921/1/GSM_2008_3.pdf |
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| Summary: | This study examined the operation of unconscionability in the law of
franchising and the nature of existence of unconscionability in practice of
franchising. Franchising is relatively a new branch of commercial law and
practically opened to various forms of abuses by the franchisors and
franchisees. Meanwhile, unconscionability has a rather uncertain scope
within the general sphere of contract law. It is therefore, important to also
identify the true nature of franchising, the development of unconscionability
and its relationship with the relevant contractual theories and other doctrines
or notions, the probabilities of unconscionable practices in franchising and
the totality of the whole spectrum of the idea of unconscionability from the
legal perspectives.
Applying the qualitative approach by means of inductive reasoning using the
historical research method, this study found that franchising resulted from the
commercial practices or conveniences rather than any legal tradition. It is
multidimensional in nature, which incorporates, among other, the concept of contract law, a notion of licence and some features of usufruct.
Unconscionability is the most proper doctrine to deal with the abuses and
unfair practices that occur in franchising. In fact, there are probable
occurrences of unconscionable practices in franchising in Malaysia based on
the empirical studies of actual cases. As unconscionability is still evolving
and the formulation of another parameter could still be contemplated, a new
parameter is proposed in this research whereby the broad doctrine of
unconscionability encompasses fairness, good faith, fair dealing and undue
influence, while inequality of bargaining power and honesty in certain
circumstances become the supporting factors in proving unconscionability.
From this research, it is concluded that unconscionability is the situation
whereby the contract is entered into, negotiated and obtained. As the
contract is a bargain, when the bargain is unconscionable it becomes
unconscionable bargain. Unconscionability is an essential doctrine in the law
of contract and the formulation of the new parameters of unconscionability in
the contract law is also applicable to the law of franchising. The parameters
can assist in promoting conscionability in the franchise business environment
locally and internationally. |
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