ADHESION CONTRACT

By
Real Estate Agent with Solid Source Realty,Inc.
https://activerain.com/droplet/8VP

A contract that is one-sided, favoring the party who drafted the document.  In fact, an adhesion contract can be so one-sided that doubt arises as to its being a voluntary and uncoered agreement because it implies a serious inequality of bargaining power. Courts will not enforce provisions in adhesion contracts that are unfair and oppressive to the party who did not prepare the contract.  Also called a take-it-or-leave-it contract.

Contracts with a lot of fine print, such as franchise agreements, mortgages and leases, are sometimes challenged as adhesion contracts on the basis that the nondrafting party did not have a chance to bargain on the various provisions of the agreement.

An insurance contract (property,title, life) also is sometimes challenged as being an adhesion contract.  Courts have held that any ambiguity is to be construed in favor of the insured, and any exclusion from coverage must be clearly and conspicuously stated.  Courts will also apply the doctrine of unconscionability.

UNCONSCIONABILITY:    A legal doctrine whereby a court will refuse to enforce a contract that was grossly unfair or unscrupulous at the time it was prepared;  a contract offensive to the public conscience.  The Uniform Residential Landlord and Tenant Act expressly provides that courts may refuse to enforce an unconscionable rental agreement either in whole or in part.  Under the Unform Commercial Code, unconscionable contracts are also expressly rendered unenforceable.

PLAIN LANGUAGE LAW:   A federal or state law that requires certain consumer contracts to be written in a clear and coherent manner, using words with common everyday meanings and appropriately divided and captioned by its various sections.  Some states, such as Hawaii and New York, require real estate rental agreements and consumer loan agreements to be written in plain language.

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Rainer
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Lester Harris
SOLDier Realty - Stockbridge, GA

James this is good information, I had heard of this before but not laid out as clear. It does remind me of some bank contracts on foreclosed properties or builder contracts. Good info

thanks

Dec 14, 2008 02:38 PM #1
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Rainer
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James Dean, Associate Broker/Realtor

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