Whether you are a project manager, contractor, or employee, you should always be prepared to deal with a broad range of contract types. 

Even outside the workplace, people who buy things are often given these contracts as standard forms that can’t be changed. They are also used in mortgages, transfers, car sales, etc.

So, what exactly is a contract of adhesion, and why is it so important? Keep reading to know more about the contract of adhesion meaning, its history, essential elements, benefits, and enforceability.

What is a contract of adhesion?

A contract of adhesion is an agreement when just one party to a contract is involved in its drafting. The second party involved is powerless in this negotiation, as the company that wrote the contract has full power to interpret it as it is.

When two parties with different levels of negotiating power reach an agreement, it’s called a contract of adhesion. An adhesion contract definition is as straightforward as when one party writes the terms of an adhesion contract and the other signs it. 

Now, consider how many adhesion contracts you could have signed without thinking twice. A typical adhesion contract example can be found even when updating your favorite game or app.

Type of adhesion contracts
There are different types of adhesion contracts, but the most common are browsewrap or browsewrap, click-wrap, and sign-in-wrap.

Browsewrap/ Browserwrap Adhesion Contracts
A browsewrap/browsewrap contract of adhesion is a format wherein visitors essentially agree with the site’s policies and procedures by browsing the website.

The significant characteristic of the browserwrap contract is that different sections of the agreement are embedded in hyperlinks. 

As a result, consumers may be required to click on several links in a browse-wrap contract before they can read and accept the terms of the agreement.

Clickwrap Contract of Adhesion
Users have the option to electronically accept a decision using the clickwrap agreement with a simple click of a button or the checkbox labeled “I agree” or “I accept.” 

You can find clickwrap agreements online, especially when using registration forms, access pages, checkout and payout, etc.

Sign-in-wrap Contract of Adhesion
Sign-in-wrap contracts of adhesion are commonly used contracts observed in online transactions. The users are provided with the terms and conditions when they complete the registration or sign-in procedure.

Before users can continue with registration or access a service, they must usually agree to the conditions shown in a scrollable window or pop-up box in a “wrap” style.

Sign-in-wrap contracts of adhesion can easily be found in website terms of service, cloud service agreements, and even software license agreements.

History of adhesion contracts

Initially incorporated into France’s legal framework, adhesion contracts gained traction in the US in the 20th century.

An article in the Harvard Law Review in 1919 introduced the concept of agreements of adhesion to the US laws. After considering this theory, the US courts were better equipped to decide how to uphold adhesion contracts. 

Most US courts have acknowledged the adhesive invisible contract in one way or another. Although many courts strictly scrutinize them, their growing use has revolutionized this branch of American law.

Key elements of adhesion contracts

Even though there are different parts of a contract agreement, some key elements are peculiar to every adhesion contract. They include an offer, capacity, and time for consideration.

An offer
During contract mediation, an offer and an acceptance are made, becoming an agreement. In an offer, the business specifies everything it can and will do to help the other. In exchange, the other party is obligated to meet the demands made by that party.

When both parties sign, they are legally bound by the contract terms, which dictate the specific means of acceptance.

Capacity
Coercion, fraud, force, undue influence, or deception must not have been used to induce the parties into this adhesion contract. 

Minors and people who have mental health conditions are not legally competent to provide their informed consent to form a binding contract.

It’s usually up to the party who has entered into the contract to decide whether or not to invalidate it, even if they lack the mental ability to do so.

Consideration
For the contract to be enforceable under law, the parties must exchange something of value, sometimes known as consideration.

There’s no obligation to ensure that the other person benefits from or receives an appropriate exchange.

Benefits of adhesion agreements

There are many ways in which an adhesion agreement improves the contract administration workflow and workflow of a business or organization. The benefits include:

The optimal use of time
There is less need to modify contracts for specific clients when using the contracts.

The time and effort saved by the employees in managing the contracts are substantial since nothing has to be redlined, negotiated back and forth, or unique contract clauses created since terms do not vary between parties.

Reduced expenses for transactions
By using contracts of adhesion, business organizations may significantly lower their transaction expenses.

The consistency and non-negotiability of adhesion contracts reduce the administration and communication costs. 

In the long run, this may help customers save money. 

Ease of doing business
Keeping things consistent across contracts is more convenient so businesses can determine which party is bound by which provisions. 

Since everyone must adhere to the same contract of adherence, keeping track of and maintaining complicated legal agreements is much easier.

Are adhesion contracts enforceable?

Adhesion contracts have the force of law when adequately carried out. The Uniform Commercial Code (UCC) makes adhesion contracts valid across most US counties; therefore, they are already permissible. 

However, more action is required to guarantee its enforcement. A contract may be unenforceable if its language is complex or challenging to understand or if there is a substantial imbalance between the parties’ responsibilities under the agreement.

One adhesion contract-typical in internet agreements is the browse-wrap form, which is sometimes considered unenforceable “because the terms are buried in multiple hyperlinks.” 

Nevertheless, contracts that demand users to explicitly consent to the terms—such as click-wrap and sign-in—are often deemed enforceable.

If an adhesion contract has a clause or a provision that violates conventional public policy, the court may rule that the contract is invalid. In some instances, courts may consider judicial precedent when making enforceability determinations.

Users and companies alike would be well familiarised with the regulations governing the enforcement of adhesive contracts in their respective jurisdictions.

Final words

To maintain trust and integrity in business operations, parties must be aware and cautious when navigating contractual partnerships. 

Therefore, companies and professionals should understand adhesion contracts to get into better positions to do business with transparency and assurance, promoting fairness and justice in all dealings.

Having analyzed adhesion contracts’ types, components, and perks, you are more equipped to leverage them in your commercial dealings.