terms-of-service indonesia adhesion-contracts
Can companies legally make unreasonable term of service?
<p>Say you buy a software. There is a term in the term of service that you got to pay $1 million dollar/become sex slaves, etc.</p>

<p>To what extend companies can do that?</p>

<p>There are 2 cases where something like this happen in real life.</p>

<p><a href="http://www.asiaone.com/singapore/sim-lim-scams-student-reduced-tears-after-being-charged-1k-iphone-warranty" rel="nofollow noreferrer">http://www.asiaone.com/singapore/sim-lim-scams-student-reduced-tears-after-being-charged-1k-iphone-warranty</a></p>

<p>In Sim Lim case, somewhere hidden in the contract there is a writing that user agrees to pay $30*12 insurance fee.</p>

<p>Why they write $30*12? Why not write $3600? Yea it's there to deliberately make the fee unclear. Unsuspecting user sign and is reduced in tear.</p>

<p>In Indonesia, many insurance agency would write that there is acquisition fee of say 100% from basic premi. They didn't write the dollar amount. They write it in terms of percentage.</p>

<p>That acquisition fee can be 100 times higher than the normal price of insurance if bought separately. </p>

<p>Most customers do not even know they have high premium. Their agent simply say that all money are invested.</p>

<p>Indonesian lawyers say it's legal and common in insurance industry in Indonesia. I've heard it's common in unit link in other countries too. Is it?</p>

<p>What defense do we have against such companies?</p>

<p>The first defense would be to read the contract and see what is required of the customer. If you do not understand what 30*12 means, you should not sign the contract until you get it spelled out. If you are required to pay 100% of "the premium", you need to find out what that amount is. If the contract requires you to pay a million dollars for an apple or serve as a sex slave, you also should not sign the contract. If the contract is written in Javanese and you don't speak Javanese, you should hire a competent lawyer who can give you advice, or, of course, only sign a contract that you <em>can</em> understand. There is never any requirement that you agree to someone's terms: if you don't like the terms, forego whatever it is that they are offering you.</p>

<p>In the case of the million dollar apple, you can also seek to have the contract voided under the doctrine of unconsionability (see <a href="https://law.justia.com/cases/federal/appellate-courts/F2/350/445/74531/" rel="nofollow noreferrer">Williams v. Walker-Thomas</a>, 350 F.2d 445). Especially in the case of sex-slavery, such a contract probably cannot be enforced anywhere, since in general, contracts cannot require people to do something illegal, nor can they require a person to abandon fundamental rights (first-born son or suicide are not enforceable terms).</p>
