A contract of adhesion is a type of legal agreement in which one party, typically a larger and more powerful entity, offers a standardized contract to the other party on a “take-it-or-leave-it” basis, with little to no room for negotiation or modification.

In simpler terms, a contract of adhesion is a contract where one party holds a significantly stronger bargaining position than the other party, leading to an unequal distribution of power. This type of contract is often used in situations where the smaller party, such as an individual consumer or an employee, has little to no ability to change the terms of the agreement.

Examples of contracts of adhesion can include employment agreements, insurance policies, rental agreements, and consumer contracts, among others. In these cases, the party with the stronger bargaining position typically drafts the contract in their favor, including clauses that limit the other party’s legal rights, such as mandatory arbitration and waiver of the right to sue in court.

The term “adhesion” refers to the fact that the smaller party is essentially “stuck” with the terms of the contract, with no ability to negotiate or change them. This type of contract is often criticized for being unfair and imbalanced, as it gives the larger party a significant advantage over the smaller party.

However, it’s worth noting that not all contracts of adhesion are inherently bad. In some cases, they may be necessary to maintain efficiency and consistency in certain industries or situations. For example, standard form contracts used in the insurance industry can help speed up the process of issuing policies and claims.

In conclusion, a contract of adhesion is a legal agreement that is offered on a “take-it-or-leave-it” basis, with little to no room for negotiation or modification. It’s commonly used in situations where the larger party has a stronger bargaining position than the smaller party. While these contracts can be criticized for being imbalanced, they may be necessary in certain situations to maintain efficiency and consistency.