Contract of Adhesion
Also known as: Adhesion Contract, Take-It-or-Leave-It Contract, Standard Form Contract
A standardized contract drafted entirely by one party (the builder) that the other party (the buyer) can only accept or reject with no meaningful ability to negotiate the terms.
Detailed Explanation
Most production builder purchase agreements are contracts of adhesion. The builder's legal team writes every word, and the buyer is presented with a finished document. The sales agent typically has no authority to change the terms.
Contracts of adhesion are not automatically unenforceable — they are common in many industries. However, courts scrutinize them more closely, especially when specific provisions are unfairly one-sided.
If a court finds that a contract of adhesion contains unconscionable terms — provisions that are so unreasonably favorable to the builder that they shock the conscience — it may refuse to enforce those provisions.
In Your Contract
You will not see the phrase "contract of adhesion" in the document itself. It is a legal characterization of how the contract was created. The fact that you cannot negotiate the terms makes it a contract of adhesion.
Key Points
- 1Most builder contracts are contracts of adhesion — standardized and non-negotiable.
- 2They are not automatically unenforceable, but courts examine them more closely.
- 3Unconscionable provisions within a contract of adhesion can be struck down.
- 4The adhesive nature of the contract is important context if you ever need to challenge a specific clause.
- 5Having the contract reviewed by an attorney before signing is especially important for adhesion contracts.
Related Content
Have a new construction contract? Scan it for $49 at fineprint.homes
Scan Your Contract