The guidelines and chargeback fees clauses required by large retailers are negotiable. The chargeback fees currently being imposed on suppliers are exceedingly high and in most cases, they are not founded justly. Though contracts are legally binding, discontent backed by facts on unfairness from one of the parties makes the fees clauses negotiable (Jennings, 2008). The stakeholders involved in clothing supply can negotiate and seek common ground concerning the penalty clauses and the other guidelines.
Applicability of the doctrine of unconscionability
The doctrine of unconscionability is applied during the defense against the enforcement of a contract when the terms imposed on one party are excessively unfair. The imposition of a $400 charge for late delivery of a $500 shipment defies conscience. As such the doctrine of unconscionability can apply to compel the retailers to lower the charges and make the terms of the contracts fair to all the parties involved. Moreover, the suppliers claim that the retailer’s charges are not founded justly. They claim that 25-50% of the charges are imposed wrongly. These claims prove the necessity for suppliers to seek the doctrine of unconscionability in their defense and quest for fairer contracts terms.
Ethicality and enforcement
It is unethical for large retailers to impose “take it or leave it” clauses on small suppliers. The imposition of heavy fines for mistakes that were beyond the control of the suppliers is unethical (Jennings, 2008). It hurts the businesses of small suppliers and violates the rules on fair play in business. Courts should enforce contracts crafted by negotiation rather than through economic power. The performance requirements are one-sided in this case. They favor the enforcement parties which have superior bargaining power in the contract-the large retailers.
Reference
Jennings, M. (2008) Business: Its Legal, Ethical, and Global Environment, 8th Edition.
South Western Educational Publishing, p. 444.
