BY SCOTT J. BURNHAM
The greatest problem facing modern contract law is how to deal with the contract of adhesion. By definition, such a contract is prepared in advance of the transaction by the party with greater bargaining power, who then offers it to the other party on a take it or leave it basis. Most of the concern about contracts of adhesion focuses on the consumer, for a consumer is generally offered contract terms on this basis, and generally lacks the sophistication to understand the terms of the transaction. Nevertheless, many commercial contracts fit this description; for example, franchise agreements and financing agreements with small businesses. This essay argues in favor of reforms that will mitigate the harsh effects of the contract of adhesion on all parties, and not just on consumers.
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