Which scenario best exemplifies a contract of adhesion?

A contract of adhesion exemplifies a scenario where one party has significantly more power than the other in the creation of the contract terms, leading to a "take-it-or-leave-it" situation. This concept is most effectively illustrated by a standard insurance policy, where the insurer presents a predefined set of terms that the insured must accept in full or reject altogether.

In such cases, the insured usually has little to no opportunity to negotiate specific provisions or alter terms, as the policy is prepared in advance with all stipulations by the insurer. This imbalance helps define contracts of adhesion as they often involve standardized forms or agreements where one party occupies a superior bargaining position, effectively leaving the weaker party without meaningful options for negotiation.

Conversely, the other scenarios involve variations that do not reflect this imbalance: a custom-drafted agreement between two businesses implies a negotiation process where both parties contribute to the terms, a negotiated partnership agreement further emphasizes mutual agreement and modification, and a contract requiring both parties to modify terms indicates a cooperative approach rather than adhesion.