Adhesion Contract

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An adhesion contract is a contract between parties with different levels of negotiating power. Typically, these are structured as “take it or leave it” contracts, with the party with the stronger bargaining position dictating its terms and there being little or no negotiation. For example, a person renting a car at an airport counter may be presented with an eight-page agreement full of provisions favorable to the rental car company. The same often occurs when people purchasing access to recreational activities, such as skiing or boating, are required to sign liability waivers to participate in the activity.

While adhesion contracts are generally considered enforceable, they may be scrutinized for unfairness or unconscionability to a greater extent than other contracts. In particular, adhesion contracts that waive the right to sue as a remedy for personal injury and agreements calling for harsh repayment terms of loans or financing transactions have often been struck down as being unconscionable.