Although adhesion contracts may seem relatively straightforward, many legal and ethical questions arise when dealing with them.
Can You Change the Terms of an Adhesion Contract?
Typically, the weaker party cannot change the terms of an adhesion contract, which calls their fairness into question.
What Do Courts Review Adhesion Contracts For?
When the weaker party wants to get out of an adhesion contract, they may sue the more powerful party and get a court to review the contract itself. Here is what the court will look for.
- Doctrine of reasonable expectations: The contract must have terms that a “reasonable person” would expect to be in a contract. While this is subjective, the court will reject a contract with terms that a “reasonable person” would not have accepted if they had known those terms were in the contract.
- Doctrine of unconscionability: The language of the contract must be clear and unambiguous or conscionable. If fraud, duress, undue influence, or fine print is involved, the contract may be declared unconscionable, and therefore null and void. Courts will also consider substantive unconscionability — that is, whether or not the content of the contract is oppressive. Some factors that a court would find oppressive include inflated prices, unfair disclaimers, immoral clauses, or terms that contradict public policy.
Are Adhesion Contracts Enforceable?
Not all adhesion contracts are signed in the same way. That could affect their enforceability beyond the content they include. Even if an electronically signed contract is declared reasonable and conscionable, it could still be found unenforceable, depending on how the consumer signed the contract online.
- Browse-wrap contracts: This type of contract requires the consumer to click through multiple hyperlinks to accept a company’s terms and conditions. Courts do not enforce these contracts because the terms are buried, so the contract falls under unconscionability.
- Click-wrap contracts: Click-wraps appear in an immediately available pop-up window, requiring the consumer to click “I agree.” Courts enforce click-wrap contracts, unlike browse-wrap contracts.
- Sign-in-wrap contracts: Sign-in-wraps fall somewhere in between browse-wraps and click-wraps. They include a hyperlink labeled either “terms of service” or “terms and conditions.” To accept, users must click “I agree” or “I accept” as the last step of a process before using a product or service.1 Courts enforce sign-in-wraps.