An adhesion contract is a legally binding agreement drafted by one party – usually the stronger or morae powerful entity – offered to the other on a “take-it-or-leave-it” basis without room for negotiation. Common in consumer and financial sectors, these contracts appear in areas such as insurance policies, software licenses, banking agreements, and online terms of service. The key characteristic is the imbalance of bargaining power, where the weaker party must either accept the terms or forgo the product or service altogether. In business and finance, adhesion contracts streamline operations and reduce transaction costs but can raise concerns over fairness and transparency. Courts often review them closely to ensure they are not unconscionable or exploitative, balancing the need for efficiency with consumer protection.
