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The Judicial Regulation of Improper Bargaining and of Violations of Law and Public Policy


The remedies available for improper bargaining are covered in the discussion of each of the separate doctrines in the following sections. This overview identifies and introduces the common remedial principles that apply to the granting of relief under the doctrines.

Avoidance and restitution

A contract induced by improper bargaining is voidable. This means that it can be avoided (rescinded) by the party who is the victim of that improper conduct. A voidable contract must be distinguished from a void contract. If a contract is void (as it would be, for example, if one party failed to give consideration), it is a legal nullity, and neither party can sue to enforce it. By contrast, a voidable contract is a valid contract that remains fully effective unless the aggrieved party elects to exercise the right to terminate it. The aggrieved party therefore has a choice—either she may sue to avoid the contract, or, if she subsequently decides that she wants to keep the contract, despite the other party’s improper bargaining, she may do so. If she does not choose to avoid the contract, she may have one of the alternative remedies described below. Note that only the aggrieved party has the election to avoid the contract or keep it in force. Obviously, the party who is guilty of inducing the contract through improper bargaining cannot use his own wrongdoing as the basis of a claim that the contract should not be enforced. The aggrieved party may use the right of avoidance affirmatively, for example, by suing for a declaratory judgment terminating the contract, or defensively, by raising it as a defense when sued on the contract. When a contract is avoided, the general rule is that both parties are entitled to restitution because it would unjustly enrich a party to retain a benefit under an avoided contract. In appropriate cases, the fact that the contract was induced by improper means may affect the equities relevant to restitutionary recovery, resulting in a reduction or elimination of the restitutionary claim of the party at fault.

Adjustment of the terms of the contract to correct the consequences of improper bargaining

If the aggrieved party decides not to avoid the contract, but the other party’s improper bargaining resulted in terms that are unfair, the aggrieved party may ask the court to enforce the contract after removing its unfair aspects. Offending terms may be removed entirely or may just be altered to eliminate their unfair effect. This alternative is not available in all situations and may not be possible when the problem affects the very basis of the contract. In other cases, it may be the only remedy available because the problem is not serious enough to merit avoidance.


As noted above, restitutionary damages are available where a contract is avoided. However, if the aggrieved party elects not to avoid the contract, there may be the possibility of compensatory damages to remedy the effects of the improper bargaining. Compensatory damages are not available in all cases, but courts do have remedial discretion to award such relief where appropriate. This relief may be aimed at compensating the aggrieved party for a loss in consequence of the improper bargaining, or it could compensate for tortious injury where the wrongful act is a tort as well as a bargaining impropriety.

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