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Adhesion Contract – Definition

Adhesion Contract Definition

An adhesion contract is defined as a contract which gets drafted by one party and then signed by another. The party writing the contract usually has a higher bargaining power than the one signing which means that the signing party has only two options: accepting the contract or rejecting it. This contract is also known as a boilerplate contract or a standard form contract. It occurs typically between businesses and customers.

A Little More on What is an Adhesion Contract

For an adhesion contract to be valid, it must meet the following requirements:

  • The contract must include all the consumer’s data and be signed by them
  • It should include the clauses by which it is governed in the same document or an annex.
  • It should exclude any abusive clause so considered by the law.

Example of adhesion contracts

Some famous examples include the contracts for the provision of public services like water and electricity. Banks and insurance companies also have these type of contract, but sometimes it’s possible that the contracts are held between individuals. This gives rise to the adhesion contract between individuals.

What makes this contract a controversial one is a fact that one of the parties cannot negotiate the clauses that affect it. This leads to inequality to one of the parties, and this is the reason why sometimes there are abusive clauses in the contract.

Limitation of Adhesion Contract

Legal limitations: There are two of them. One is that the voluntary act cannot transgress the law and the other is that the contract cannot disregard the rights that are declared inalienable by the law.

Protection of the legitimate rights of a third party: The legitimacy or illegitimacy of these rights depends on whether it is in good faith. This corresponds to whether the third party ignores or knows the unlawful situation that might occur against him.

In this type of contract, an offer is made by one party, and it contains all the elements of the contract. Since this contract does not accept discussions, the other party either accepts or rejects the contract. However, adherence to a contract already entered by other parties should not be confused with accession contracts.

Adhesion contracts possess protection measures on consumers. These type of contracts may also exist between companies. Since the consumer is the recipient of the service, the abusive clauses are defined by consumer law.

References for Adhesion Contract

Academic Research for Adhesion Contract

 

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