What does Adhesion Contract mean?
An adhesion contract is a bargaining agreement between two parties, of which one party creates the contract to fit their own advantages, benefits, or wishes. Basically, in this type of contract, one party has all of the bargaining power, written up like a "take it or leave it" basis. For example, in an adhesion contract that offers goods or services to a consumer, the consumer does not have a say in negotiating the terms of the contract, and can only obtain that good or service if they agree to the contract in full.
How This is Possible
At first thought by looking at the definition, you might think that an adhesion contract can seem unfair to the non-negotiable party. However, it's actually perfectly common and used in many circumstances without issue. Most businesses have adhesion contracts for their customers, consumers, or employees that they need to abide by to benefit from what the business has to offer. Other types of adhesion contracts can include insurance agencies or residential leasing agreements.
However, sometimes, the stipulations of some adhesion contracts are so unfair to the consumer that it can be overturned in court. For example, if an adhesion contract outlines strict or unreasonable punishments for consumers who do not abide by their contract in full, the court could refuse to deem the contract appropriate. Or, if the adhesion contract outlines outrageous stipulations in such fine print that it's easily overlooked or dismissed by the consumer, the court could deem that as unfair and state that the consumer did not agree to the contract's terms or conditions.
Category: Contract Law