Private Contract
The law of private contract enters the realm of investor protection since to open a securities account requires the retail customer to execute a contract with a broker. That contract invariably is a standard form contract that contains numerous terms not subject to bargain. While MiFID and other law will mandate the disclosure of certain terms, the contract nevertheless falls within the purview of specialised legislation such as the Unfair Consumer Terms Directive to determine the validity of any particular term. Standardised contracting in the investment sphere does not differ in any respect from standardised contracting in sales of goods. Legal issues such as inequality of bargaining power, consent, damage limitations and enforcement of terms are likely result in dispute thereby implicating relevant contract and consumer protection law.
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