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.

Brought to you by Node your homework, and me finishing a law test.