Adhesion Contract

A type of contract, a legally binding agreement between two parties to do a certain thing, in whi
ch one side has all the bargaining power anduses it to write the contract primarily to his or her
advantage.
An example of an adhesion contract is a standardized contract form that offers goods or services
to consumers on essentially a "take it orleave it" basis without giving consumers realistic opportu
nities to negotiate terms that would benefit their interests. When this occurs, theconsumer cannot
obtain the desired product or service unless he or she acquiesces to the form contract.
There is nothing unenforceable or even wrong about adhesion contracts. In fact, most businesses
would never conclude their volume oftransactions if it were necessary to negotiate all the terms o
f every Consumer
Credit contract. Insurance contracts and residential leasesare other kinds of adhesion contracts.
This does not mean, however, that all adhesion contracts are valid. Many adhesion contracts are
Unconscionable; they are so unfair to the weaker party that a court will refuse to enforce them.
An example would be severe penaltyprovisions for failure to pay loan installments promptly that
are physically hidden by small print located in the middle of an obscure paragraphof a lengthy lo
an agreement. In such a case a court can find that there is no meeting of the minds of the parties t
o the contract and that theweaker party has not accepted the terms of the contract.
West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All
rights reserved.

adhesion contract (contract of adhesion)

n. a contract (often a signed form) so imbalanced in favor of one party over the other that there is
a strong implication it was not freelybargained. Example: a rich landlord dealing with a poor tena
nt who has no choice and must accept all terms of a lease, no matter howrestrictive or burdensom
e, since the tenant cannot afford to move. An adhesion contract can give the little guy the opportu
nity to claim incourt that the contract with the big shot is invalid. This doctrine should be used an
d applied more often, but the same big guy-little guyinequity may apply in the ability to afford a
trial or find and pay a resourceful lawyer

contract of adhesion
A contract offered intact to one party by another under circumstances requiring the second party to
accept or reject the contract in total without having the opportunity to bargain over the wording.
Insurance policies are contracts of adhesion and, as such, are construed strictly against the party
writing them (i.e., the insurer).