What defines an Adhesion Contract?

An Adhesion Contract is defined as a standardized contract that is offered on a non-negotiable basis. This means that the terms of the contract are set by one party (usually the provider of the contract, such as an insurance company) and the other party (the consumer) has little to no ability to negotiate those terms. The parties involved in an Adhesion Contract typically do not engage in a bargaining process; instead, the consumer must accept or reject the contract as it is presented.

This characteristic of not being negotiable is important because it highlights the imbalance that can exist in such contracts, where one party holds significantly more power over the terms than the other. This can lead to legal interpretations that protect the weaker party in case of disputes, as courts often scrutinize these contracts for fairness.

In contrast, other contract types described do not align with this definition. For example, a contract with negotiable terms allows for both parties to discuss and adjust the conditions before agreement, while a verbal agreement might lack the formal structure that defines an Adhesion Contract. Lastly, while mutual consent is essential in forming contracts in general, it does not specifically pertain to the nature of Adhesion Contracts, which are defined more by their standardization and lack of negotiation