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Adhesion Contract
What is meant by Adhesion Contract?
It is a term that is used in the Contract Law. Most of us may not be familiar with the term but we would have signed at least once an Adhesion Contract in our adult stage of life.  It can be defined as “a contract between two unequal bargaining partners and does not allow for negotiation.” Things considered as Adhesion Contract are listed below:

• An apartment lease document
• End user’s licensing agreement (EULA)
• An agreement with a professional or a local dry cleaner
• A standard insurance policy

In actual fact, an Adhesion contract is a “take it or leave it” understanding sandwiched between the two parties, one well thought-out to be greatly stronger than the other.
Simple Example for Adhesion Contract:

• An insurance company (the stronger party) by and large offers a product or service which
  the individual (the weaker party) wishes or desires.
• Instead of going in for a negotiation between the two parties the insurance company offers the customers with a “standard contract” that consist of pages that are being packed in legal language.
• The customer wants the insurance policy, and initially he just goes through quickly the terms and signs the papers having faith in them. This might not be a problem for the weaker party, as he/she will be getting the benefit that was promised in the insurance coverage.

The same above mentioned principle goes for the EULA or for the lease conditions.
Difficulties in the Adhesion Contract:

• Until the terms and conditions are being met by the weaker party the Adhesion contract will possibly not be a bad agreement.
• The legal difficulty comes when there is an infringement by the stronger party with regard to the contract terms.
• Before signing the weaker party has to understand the entire document in order to avoid legal problems. In Adhesion Contract the Clauses support the stronger party.
• The American courts have created well-built opinions on the legal enforcement of an Adhesion contract for the weaker party.

Questions:

• List some examples for the Adhesion Contract.
• What is meant by class action lawsuits?

http://classof1.com/homework_answers/business_law/adhesion_contract/

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