What defines a Contract of Adhesion?

A Contract of Adhesion is characterized by its nature of being a standardized agreement drafted by one party, who holds more power, typically leaving the other party with little to no ability to negotiate the terms. This concept is crucial in understanding many consumer contracts, especially in fields like insurance, where consumers often must accept the terms as they are presented or decline the agreement entirely.

In this type of contract, the party with less power (often the consumer) is presented with a "take it or leave it" situation. This means they can only accept all the terms laid out by the other party, usually a corporation or service provider, without the opportunity for negotiation. Thus, the defining characteristic is the lack of bargaining power, underscoring why one must accept all terms or reject the contract altogether.