A contract of adhesion is a legally binding agreement between two parties, typically characterized by unequal bargaining power, where the terms and conditions of the agreement are set and imposed by one party, leaving the other party with little or no opportunity to negotiate or modify the terms. This type of contract is usually presented in a "take it or leave it" format, where the stronger party dictates the terms, and the weaker party has no choice but to either accept the agreement as presented or forgo the opportunity altogether.
In a contract of adhesion, the terms tend to be standardized and drafted by the party with superior bargaining power, such as a corporation or an employer. These agreements are frequently encountered in various contexts, including insurance policies, rental leases, employment contracts, and software licenses. The stronger party may often include complex or one-sided provisions that heavily favor their interests, while offering minimal or limited benefits to the other party.
While contracts of adhesion are generally lawful, courts closely scrutinize and interpret the terms to ensure fairness and equity. Any ambiguous or unfair provisions may be subject to judicial intervention or nullification. However, challenging such contracts can be challenging, as the weaker party must overcome the legal presumption of voluntariness and demonstrate that the terms are unconscionable or overly oppressive.
In summary, a contract of adhesion refers to an agreement where the terms are formulated and imposed by one party with superior bargaining power, while the other party must accept the terms without negotiation or modification.
