Agreement of Adhesion: What It Means and How It Affects You
An agreement of adhesion, also known as a standard form contract, is a contract where one party has significantly more bargaining power than the other. The terms of the contract are set by the party with more power and the other party has little or no ability to negotiate the terms. These types of agreements are commonly used in various industries, including insurance, banking, and telecommunications.
In an agreement of adhesion, the language used is often complex and can be difficult for the average person to understand. This can make it difficult for the person to know what they are agreeing to when they sign the contract. Many people sign these types of contracts without fully understanding the terms and conditions.
One of the most significant effects of an agreement of adhesion is that it can limit the ability of the person signing the contract to take legal action against the party with more bargaining power. Many of these contracts contain arbitration clauses, which require disputes to be resolved through arbitration rather than through the courts. This can be disadvantageous to the person signing the contract as arbitration can be more costly and the arbitrator may be biased towards the party with more bargaining power.
Another effect of an agreement of adhesion is that it can limit the ability of the person signing the contract to modify the terms of the agreement. If there are specific provisions of the contract that the person does not agree with, they may not have the ability to negotiate those terms. This can be problematic if the terms of the contract change or if the person`s circumstances change, making the contract less favorable for them.
In some cases, an agreement of adhesion may also include clauses that are illegal or against public policy. These clauses can be used to take advantage of the person signing the contract or to circumvent laws that protect consumers. If a clause in an agreement of adhesion is illegal, it will not be enforceable.
In conclusion, an agreement of adhesion can have significant effects on the person signing the contract. It is important to carefully read and understand the terms of any contract before signing it. If you are unsure about any aspect of the contract, seek legal advice. As a consumer, it is important to be aware of your rights and to protect yourself from agreements of adhesion that may put you at a disadvantage.