Which statement about adhesion contracts is correct?

• A. They are drafted by the insurer and accepted as-is
• B. They are negotiated in detail between insurer and insured
• C. They require mutual consent to all terms
• D. They are void if insured disagrees with terms

Answer: (A)

Adhesion contracts are standard-form agreements offered by one party with little or no room for negotiation. In insurance, the policy is drafted by the insurer and presented to the applicant on a take-it-or-leave-it basis, so the insured must accept the terms as written or decline coverage. Because the insurer controls the language, terms are typically not negotiable, aside from possible endorsements or riders. If the insured disagrees with terms, they can choose not to accept the contract; the policy isn’t automatically voided by disagreement, though the contract wouldn’t take effect unless accepted. Courts may review for unconscionability or ambiguity, but the defining feature is the insurer-drafted, non-negotiable nature.