Legal Definitions - adhesory contract

An adhesory contract (also commonly referred to as a contract of adhesion) is a standardized agreement drafted by one party and presented to another party on a "take it or leave it" basis, with little or no opportunity for negotiation. In such contracts, one party typically holds significantly more bargaining power than the other, and the weaker party must either accept the terms as written or forgo the product or service entirely. These contracts are prevalent in modern commerce, especially in consumer transactions where businesses offer standard terms to a large number of customers.

• Software End-User License Agreement (EULA): When you download and install a new software application or operating system, you are almost always presented with a lengthy End-User License Agreement. To proceed with using the software, you must click "I Agree" to all the terms and conditions, which cover everything from usage restrictions to liability limitations. You cannot negotiate specific clauses, such as requesting a different warranty period, altering the dispute resolution process, or removing data collection provisions. You either accept the entire agreement as presented by the software developer or you cannot use the software. This illustrates an adhesory contract because the software provider dictates all terms, and the user has no power to modify them.
• Car Insurance Policy: When purchasing car insurance, customers are typically presented with a standard policy document by the insurance company. This document outlines the coverage limits, deductibles, exclusions, claims procedures, and conditions for premium adjustments. An individual customer cannot, for instance, negotiate to remove a specific exclusion clause, demand a different set of conditions for filing a claim, or alter the terms regarding policy cancellation. The customer's only option is to accept the standard policy offered by the large insurance provider or choose not to purchase coverage from them. This demonstrates an adhesory contract due to the significant imbalance in bargaining power, where the individual consumer must adhere to the pre-set terms of the large corporation.
• Online Terms of Service for a Social Media Platform: When creating an account on a social media website or streaming service, users are required to agree to the platform's Terms of Service. These terms dictate how user data will be handled, what content is permissible, the rules for account suspension, and the platform's liability. A user cannot negotiate to change the platform's content moderation policies, demand different privacy settings than those offered, or alter the jurisdiction for dispute resolution. The user must accept the entire set of terms as presented by the large tech company to use the service. This exemplifies an adhesory contract because the platform, as the party with greater power and a standardized offering, presents non-negotiable terms to all its users.