Standard Forms and Adhesion Contracts

Question 1

Define: Adhesion Contracts

Answer 1

Standardized contracts, imposed and drafted y the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or to reject it.
Basically, if the contract is drafted by the stronger party, it is “take it or leave it,” and there is no room to negotiate, the contract is a contract of adhesion.

Question 2

Are contracts of adhesion enforceable?

Answer 2

Generally yes, they are enforceable except 1) when they are unduly oppressive and outside the expectations of the party, 2) unconscionable.

Question 3

What are examples of contracts of adhesion?

Answer 3

Lease, Dry cleaner ticket, concert ticket, cell phone contract, etc.

Question 4

What are the limitations that the court has put into place for contracts of adhesion?

Answer 4

1) Terms that do not fall within the reasonable expectation of the weaker, adhering party will not be enforced against him.
2) A provision will not be enforced, even if consistent with the expectations of the parties, if it is unduly oppressive or unconscionable.

Question 5

Define: Exculpatory Agreement

Answer 5

Makes one party not liable for injuries caused by their negligence.

Question 6

What is the difference between exculpatory agreements and indemnity agreements?

Answer 6

Exculpatory Agreements: shifts burden from a party

Indemnity Agreements: Shifts burden to a third party

Question 7

Are Exculpatory agreements enforceable?

Answer 7

Contracts where one seeks to relieve themselves from the consequence of their own negligence (exculpatory or indemnity) are generally enforced unless it would be against public policy or there is something in the social relationship against the parties militating against upholding the agreement.

Question 8

Does using a form contract automatically create an adhesion contract and a disparity?

Answer 8

No, simply because the contract is a standard form does not mean it is an adhesion contract or that their is a disparity in bargaining power.

Question 9

Define: Boilerplate contract

Answer 9

A standard or template contract which is generally not overly negotiable.

Question 10

Are boilerplate contracts and contracts of adhesion the same?

Answer 10

They can be, but often they are not.