Adhesion Contract

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 4,784 reviews

Jump to Section

Need help with an Adhesion Contract?

CREATE A FREE PROJECT POSTING
Post Project Now

Adhesion contracts are the right solution when you need to protect your company at scale. They can save you time and money since they do not require you to negotiate the terms for each transaction. However, using an adhesion contract the wrong way can result in massive legal consequences.

This post helps you understand how adhesion contracts work, important considerations when using them, and application.

What is an Adhesion Contract?

An adhesion contract, also called a boilerplate contract and standard form contract, is an agreement drafted with non-negotiable terms and conditions . Parties with a significant amount of bargaining power offer them to others. While they may not work for some relationships, they often work well when serving numerous parties across homogeneous transactions.

The party with greater bargaining power negotiates the agreement, while the party with less bargaining power is generally in great need of specific goods and services. Generally, the latter cannot amend or negotiate the contract’s terms.

Businesses most commonly use adhesion contracts for the following situations:

  • Situation 1 . Leases
  • Situation 2 . Asset purchases
  • Situation 3 . Motor vehicle purchases
  • Situation 4 . Insurance policies
  • Situation 5 . Mortgages
  • Situation 6 . Medical care
  • Situation 7 . Airline tickets

Buyers have no room to negotiate terms, meaning that the party who drafts the contract has the legal upper hand during every transaction. The majority of consumer contracts are adhesion contracts, and large businesses couldn’t negotiate contracts efficiently if the only means of enforceability were to negotiate each one individually.

Many businesses create standard contracts for their prospective clients to sign. If consumers are dissatisfied with the terms of the agreement as written, they have the right to take their business elsewhere.

You can learn more about adhesion contracts by checking out this article .

What is ‘Contract of Adhesion’ in Law?

‘Contracts of adhesion’ in law is a concept that means the relationship must adhere to the original terms without renegotiation or amendment. While contracts of adhesion are critical in the business world, there is considerable debate over their fairness and carefully scrutinized by courts.

When determining the fairness of an adhesion contract, courts consider the following factors:

  • Factor 1 . Possibility of a surprise
  • Factor 2 . Inadequate notice requirements
  • Factor 3 . Significant inequity
  • Factor 4 . Leverage balance
  • Factor 5 . Other relevant factors

Fans of adhesion contracts say that they promote efficiency by saving parties time and money on negotiations. Without form contracts, the time required to negotiate and prepare a single contract for each transaction would significantly increase. As a result, prices would rise, possibly dramatically.

Additionally, there is whether adhesion contract offerors should be immune from liability for unfair agreements. Some contract clauses give rise to significant concern due to the disparity they could cause a more vulnerable party.

Clauses that may concern courts when ruling over adhesion contracts include:

The most critical step you can take before signing an adhesion contract is to read it thoroughly. The business writes adhesion contracts for their benefit, which means you should consult a contracts lawyer with legal questions. This strategy helps you understand the terms and conditions before offering or signing.

Meet some lawyers on our platform

Bryan B.

117 projects on CC
View Profile

Faryal A.

6 projects on CC
View Profile

Briana C.

63 projects on CC
View Profile

Elbert T.

3 projects on CC
View Profile

Examples of Adhesion Contracts

You may not realize it, but adhesion contracts are around us every day. If you use cell phone service, stay in hotels, go to college, attend a show, or fly on a plane, you have been a party to an adhesion contract. You also know how much they favor the entity offering them, which means it’s essential to understand how they work in the real world.

Here’s are three common, everyday examples of adhesion contracts:

Example 1. Internet Service Providers

Billions of people and companies worldwide need internet access. It’s unreasonable to expect internet service providers (ISPs) to negotiate contracts with each customer, and it would not be a profitable venture, nor would this system give rise to innovation.

Example 2. Cell Phone Service Providers

Cell phone service providers are in the same situation as ISPs. Mass demand ensures that there are adhesion contracts to reduce costs. However, they don’t use the same contract for every plan and may customize certain sections to create new adhesion contracts.

Example 3. Hotels & Motels

It makes sense that hotels and motels would use adhesion contracts. After all, they are mainly offering lodging at scale. Boilerplate language can also be included with a contract clause indicating when to address a broader customer base.

ContractsCounsel Adhesion Contract Image

Image via Pexels by RODNAE

Benefits of Adhesion Contracts

Adhesion contracts are beneficial for service contracts , lease agreements , and insurance agreements . Although they hasten the purchasing process, their use is still debated. However, they are an excellent solution for the right company.

Three benefits of adhesion contracts include the following:

Benefit 1. Improved Performance

By establishing a standardized contract with non-negotiable terms, adhesion contracts eliminate the need for customized documents tailored to each consumer, increasing efficiency and saving time for buyers and sellers.

Benefit 2. Lower Costs

Transaction costs incurred are much lower with adhesion contracts. Many deals include negotiation, communication, and enforcement expenses, and adhesion contracts significantly reduce these costs by encapsulating all relevant information in a non-negotiable, legally enforceable contract.

Benefit 3. Perfect for Certain Transactions

Regular adhesion contract users believe that these types of contracts are simplified, offer consistency, and remove the need to engage in lengthy contract negotiations . When your business needs to scale, an adhesion contract may work well for you.

Critics argue that these contracts have been pushed so beyond the definition of a two-way agreement, making them unreasonable in some cases. Ensure that you speak with a legal professional about contract laws in your state to ensure that it is the best document for you.

Are Adhesion Contracts Enforceable?

Yes, adhesion contracts offer enforceability via the Uniform Commercial Code (UCC) . However, a few states, districts, and jurisdictions do not recognize the UCC, which means that adhesion contracts are invalid.

The general heuristic is that an adhesion contract is legal unless the signer finds it unreasonable. Business owners and signing parties should discuss the legality in contracts with business lawyers before entering into an executed agreement that is non-negotiable or amendable.

Here are six signs that an adhesion contract may be unenforceable:

  • Sign 1 . Severe disparity in leverage between contract parties
  • Sign 2 . Use of non-sensical language or terms
  • Sign 3 . Exploitation of vulnerable people
  • Sign 4 . Overly burdensome terms and conditions
  • Sign 5 . Doesn’t meet the signers reasonable expectations
  • Sign 6 . Serves as a violation of public policy

The UCC has guidelines that govern adhesion contracts for selling goods and services. On the other hand, adhesion contract clauses are examined more closely under state laws, and interpretation is subject to the rules there. The probability of a favorable outcome during a dispute largely rests on the facts and circumstances of the situation.

Where to Get Help with Adhesion Contracts

Adhesion contracts can be powerful but risky agreements, and their enforceability is contingent upon the proportionality and reasonableness of the contracting parties’ obligations. The circumstances surrounding the contract’s execution and all other pertinent circumstantial elements are critical considerations. Business lawyers in your state can protect your legal rights and help you navigate the complexities surrounding adhesion contracts.

Post a project in ContractsCounsel’s marketplace to get flat fee bids from lawyers to review for your project. All lawyers are vetted by our team and peer reviewed by our customers for you to explore before hiring.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Adhesion Contract Lawyers

Jason P. on ContractsCounsel
View Jason
5.0 (5)
Member Since:
December 1, 2022

Jason P.

Business Lawyer
Free Consultation
Portland, OR
7 Yrs Experience
Licensed in OR, WA
Lewis & Clark Law School

Jason is a self-starting, go-getting lawyer who takes a pragmatic approach to helping his clients. He co-founded Fortify Law because he was not satisfied with the traditional approach to providing legal services. He firmly believes that legal costs should be predictable, transparent and value-driven. Jason’s entrepreneurial mindset enables him to better understand his clients’ needs. His first taste of entrepreneurship came from an early age when he helped manage his family’s small free range cattle farm. Every morning, before school, he would deliver hay to a herd of 50 hungry cows. In addition, he was responsible for sweeping "the shop" at his parent's 40-employee HVAC business. Before becoming a lawyer, he clerked at the Lewis & Clark Small Business Legal Clinic where he handled a diverse range of legal issues including establishing new businesses, registering trademarks, and drafting contracts. He also spent time working with the in-house team at adidas® where, among other things, he reviewed and negotiated complex agreements and created training materials for employees. He also previously worked with Meriwether Group, a Portland-based business consulting firm focused on accelerating the growth of disruptive consumer brands and facilitating founder exits. These experiences have enabled Jason to not only understand the unique legal hurdles that can threaten a business, but also help position them for growth. Jason's practice focuses on Business and Intellectual Property Law, including: ​ -Reviewing and negotiating contracts -Resolving internal corporate disputes -Creating employment and HR policies -Registering and protecting intellectual property -Forming new businesses and subsidiaries -Facilitating Business mergers, acquisitions, and exit strategies -Conducting international business transactions ​​ In his free time, Jason is an adventure junkie and gear-head. He especially enjoys backpacking, kayaking, and snowboarding. He is also a technology enthusiast, craft beer connoisseur, and avid soccer player.

Lauren W. on ContractsCounsel
View Lauren
5.0 (2)
Member Since:
December 15, 2022

Lauren W.

Attorney
Free Consultation
New Port Richey, Florida
2 Yrs Experience
Licensed in FL
Western Michigan University Cooley Law School,

Accident and injury attorney. Prior to going to law school I was a paralegal for 12+ years primarily in personal injury. I also worked for a local school district as the Risk Manager and a Buyer in Procurement where I facilitated solicitations and managed all the contracts for the district.

Todd H. on ContractsCounsel
View Todd
4.8 (2)
Member Since:
December 7, 2022
Evan F. on ContractsCounsel
View Evan
Member Since:
December 3, 2022

Evan F.

Attorney & Founding Member
Free Consultation
Livonia, MI
3 Yrs Experience
Licensed in MI
Wayne State University Law School

I am the Founding Member of Evan Ficaj Law Firm PLLC, and I am passionate about helping businesses launch, grow, and succeed. My law firm assists clients with business, contract, entertainment, IP, and estate planning matters.

Michael C. on ContractsCounsel
View Michael
Member Since:
December 5, 2022

Michael C.

Owner / Managing Attorney
Free Consultation
Staten Island, New York
11 Yrs Experience
Licensed in NJ, NY
Widener University Commonwealth Law School

We are business and immigration attorneys, committed to delivering compassion-driven and innovative legal solutions that better our clients' lives. Founded in 2019, Carbone Law provides legal services tailored to the unique needs of our clients. We pride ourselves in building a personable attorney-client relationship and are dedicated to establishing a complete understanding of our client’s legal issues, so that we can develop an effective plan for achieving their desired results. Michael T. Carbone, Esq. started Carbone Law with the goal of delivering exceptional legal services to his community. At Carbone Law, Michael counsels individuals and small businesses on a variety of legal issues. Whether aiding families in building successful applications for immigration benefits or advising freelancers and business owners on contract, governance and related issues and the complexities of complying with federal, state and local laws, Michael is committed to building a lasting relationship with his clients.

David C. on ContractsCounsel
View David
Member Since:
December 6, 2022
Adjckwc B. on ContractsCounsel
View Adjckwc
Member Since:
December 27, 2022

Adjckwc B.

Founder
Free Consultation
New York
6 Yrs Experience
Licensed in NY
Florida A&M College of Law

A. Browne Esq. is an entertainment, intellectual property, and business lawyer. Her goal is always to provide the best legal representation for your creative endeavors, both tangible and intangible. Always know that the best way to deal with legal issues is to take measures to avoid them. Learn how to protect your creative work at a law firm that’s passionate about ensuring that creatives own their stuff.

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call