Definition of Adhesion contract

Adhesion contract can be defined as a contract in which power distribution between the two parties is different.

Brief Explanation of Adhesion contract

One party has considerable authority when it comes to actually creating the contract. In order to move forward with a contract of adhesion the parting offering the contract is liable to supply each and every customer with the standard terms and agreements. These should be identical with previous contracts and the terms of agreements are also happen to be non negotiable in any given circumstances. For instance, a certain insurance contract can also be termed as an adhesion contract. This means the company offering the insurance contract preserves’ the power of solely drafting the contract without concerning the potential customer. The rights of the policyholders are limited they can only refuse the contract if they don’t agree to the terms and agreements described in the it. The policyholders can’t counter the offer provided by the insurer nor they can create new contract and propose it the insurer to reach agreement.