Duhaime's Law Dictionary


Adhesion Contract Definition:

A fine-print consumer form contract which is generally given to consumers at point-of-sale, with no opportunity for negotiation as to it's terms, and which, typically, sets out the terms and conditions of the sale to advantage the seller.

Related Terms: Contract

Also contracts of adhesion.

In Continental Securities v. McLeod, Justice Wilson adopted these words to define an adhesion contract:

"Standardized contract form offered to consumers of goods and services on essentially take it or leave it basis without affording consumer realistic opportunity to bargain and under such conditions that consumer cannot obtain desired product or services except by acquiescing in form contract. Distinctive feature of adhesion contract is that weaker party has no realistic choice as to its terms.

"Contracts of adhesion are strictly construed against the party who prepared the contract."

A collective bargaining agreement, as far as the employee goes, is an adhesion contract. In these situations, as Justice Winkler remarked in Berry v Pulley:

"... the contracts are at best adhesion contracts. The union member has neither a choice in negotiating the terms nor an opportunity to decline participation in circumstances where a collective agreement is in place."

In United Realty, Justice Hinkson had before him an insurance contract, remarking of it that:

"I think that this policy of insurance can properly be classified as a contract of adhesion. It is drawn by the insurer and is presented to the assured and it either accepts or rejects it."

In Canadian Reform Conservative Alliance, Justice Huddart wrote that:

"... insurance contracts are viewed as contracts of adhesion. The insurer offers coverage under a pre-printed form that typically allows little, if any, negotiation between the parties. As an adhesion contract, an insurance policy is interpreted so the reasonable expectations of the insured may be realized."

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