The principle of transparency in standard contract terms

Freedom of contract is one of the essentials of the law of obligations. This freedom thus includes individual?s right to determine the contents of the contract as they seem fit. However, given the degree of development of economics in contemporary world, mass trade has increased, and the need for standardisation of legal procedures emerged. Consequently, unilaterally set-up contract templates, to be used for future transactions, have started to be introduced to customers in a range of legal transactions. Since the use of standard contract terms has considerably changed the legal balance to the expense of customer, the arising disequilibrium has been addressed by legal authorities in many countries, where a variety of control mechanisms have been created to restore the balance in favour of the customer. Thus, previously unilaterally-defined standard contract terms have started to be controlled. This control essentally reflects two main dimensions, namely legally-binding, and content controls. As for the transparency control, it has been developed by the court decisions and the principle of transparency was accepted at EU level, with the adoption of the on Unfair Terms in Consumer Contracts Terms in 1993.Transparency in standard contract terms requires that the terms and conditions of the contract be clear and understandable, allowing the customer to know his/her rights and responsibilities and the legal situation arising from the contract. In this framework, the principle of transparency requires that standard contract therms be comprehensible, clear and exact. In the control of transparency in standard contract terms, the main criterion should be the comprehension capacity of the average customer. The major legal consequence of non-fulfilment of the principle of transparency in standard contract terms is the invalidity of the relevant term. Besides, the customer may also have the right to compensation as a result of non-transparent standard contract terms used in the contract.Keywords: Standard contract terms, the principle of transparency, transparency control.