One way of classifying
contracts is by the distinction between
Negotiated Contracts and Contracts of
Adhesion.
Negotiated Contracts are those where both parties have similar
power in
bargaining, and jointly decide on the
content of the contract. Contracts of Adhesion,
on the other hand, involve very little bargaining, and the
terms are
adhered to by one party, usually
in return for a
privilege,
goods, or a
service.
Contracts of adhesion usually involve
parties with very unequal
bargaining positions, which is why they are also referred to as
take it or leave it contracts. Due to this
disparity in bargaining power, the
courts view them differently than
negotiated contracts. First,
ambiguities in a contract of adhesion are usually interpreted against the
party which offered the
contract (This is the
Latin term
contra proferendum). Second, courts tend to
interpret these contracts according to the
reasonable expectations of the weaker party to the contract. Finally, adhesion contracts are more likely to be found
unconscienable than
negotiated contracts. In general, the
courts tend to interpret contracts of adhesion in a manner which levels the playing field between strong and weak parties.
Some common examples of contracts of adhesion include:
Information from Legal Aspects of Architecture, Engineering, and the Construction Process, Sixth Edition, by Justin Sweet; as well as in class discussions in Construction Engineering 380 at Iowa State University, Fall 2001.
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