Adhesion Contract – A Detailed Guide

Dec 25, 2023 By Susan Kelly

There are a lot of different contracts that are made when there is a deal made between two parties. One of the contracts that is commonly used by people all around the world is the adhesion contract. Here, one party is on the superior end of the bargaining and negotiating position.

If you are someone who is not able to understand what a contract of adhesion is or how it works its history, and other aspects, then this article is just for you. So, let's jump right into the article and have a look at it.

What is Contract Adhesion?

Contract adhesion is a legal agreement that is usually drafted between two parties. However, the contract is created by one party, and all the different clauses and points are only mentioned by one party. This agreement is also called the boilerplate contract. The contract is also made in a situation when the other party does not have any chance but to take the agreement.

The consumers do get the chance to read the agreement, think about it, and make the final decision about signing the contract. However, they won't have any say in the clause; there is no middle ground for the consumers. They can either sign the contract or leave it if they don't like the terms that are mentioned in the contract.

This contract is basically made between a powerful party and a weaker party. The influential party creates the entire agreement according to the things that will give them benefit. They will mention the terms and clauses that they like without thinking about the consumer. However, the consumer must know that they have the last decision. If they don't want to sign the contract, then they don't need to.

History of Contract Adhesion:

This contract has been around for centuries all over the world. The first time this contract was created was during the French Civil Law, and this contract made its way through American law, first seen in the Harvard Law Review in 1919. With the help of this review, the government and the courts were able to understand when they could use this contract and when they should not enforce it.

This contract is being used in many different ways and many different situations. In the 20th and 21st centuries, the use of this contract started increasing, and its popularity also increased. The demand for and use of digital contracts increased, and they started becoming a part of click-through agreements.

Other than this, the contracts have been changing and evolving a lot, and the legality of the adhesion contract has changed a lot. Now, it is said that if the contract is formulated and managed in the right way, then it can come off as enforceable.

Enforceability of Adhesion Contracts:

The contracts of adhesion are basically enforceable. This means they can ensure that the consumer agrees to the terms that are written on the contract as it will be a "take it or leave it contract." There is no space for negotiation with the party who is in power.

Following are the two different types of scrutiny that are present in the adhesion contracts.

Reasonable Expectations:

The courts have tried and tested the adhesion contracts in many different ways to see if the contract is enforceable or not. It was seen that there are specific parts of the contract that can be deemed enforceable. This can happen when the contract's terms are very unexpected and beyond the thinking of the consumer.

The enforceability of the contract of adhesion depends on a variety of different things, such as the purpose of the terms, the prominence of the terms, and even the circumstances that come when the contract is being made.

Unconscionability:

This is the part where the contract is exceptionally unjust and only made to side with one party, mainly the party in power. Here, the focus is shifted from the customer and moved to complete the motive of the supplier. In these adhesion contracts, there is no choice given to the customer, and they have to accept whatever the consumer has written.

However, if it is too unjust and unfair on the signing part, then they can declare it unenforceable in the court.

Benefits of Adhesion Contracts:

The adhesion contract is used in many different areas of life, and there are also a lot of benefits that people can get from these contracts. Let's have a look at some of these benefits.

Improved Performance:

One of the significant benefits of the adhesion contract is that it reduces the need to customize the contract. Since the terms mentioned in the contract will be non-negotiable, the consumer won't be able to tailor the terms, and it will save a lot of time for both the buyers and the sellers.

Lower Costs:

When you are trying to make different contracts, there are a lot of different expenses that come with it. There are communications expenses, changing the terms of the contract, and enforcement money, and other kinds of costs. However, none of this will be a problem when it comes to the adhesion contracts. Since everything is fixed and nothing is negotiable, then there won't be any extra money spent.

Final Words:

The adhesion contracts have been in the world for centuries and have been used in courts and other parts of life in many various ways. They can be very beneficial. However, they can also be a risky agreement. These contracts are only good for one party who is stronger or the supplier who is offering the services to the consumers. Hence, if you are someone who didn't know much about this and how these contracts worked, we hope this article was beneficial for you.

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