An insurance contract is described as a contract of adhesion because:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A contract of adhesion is one drafted entirely by one party, here the insurer, and presented to the other on a take-it-or-leave-it basis. The applicant typically cannot negotiate policy terms and can only accept or reject the standardized policy. This one-sided drafting is why ambiguous policy language is generally construed against the insurer, a rule known as contra proferentem, and why courts interpret policies strictly against the drafting party. Recognizing the adhesive nature of insurance contracts is a key to understanding how they are read, construed, and enforced in litigation.
Why the other options are wrong
- B) Applicants rarely negotiate any terms; standardized policies are offered as-is, which is precisely why the contract is called adhesive.
- C) The insured contributes no wording to the policy; if both parties drafted it, the contract would not be one of adhesion.
- D) Adhesion describes how the contract is formed and written, not a timing rule about when premium becomes earned.
Memory hook
Adhesion = written by one, signed by the other. Ambiguity goes against the writer.