In: Finance
Q) When is a contract of adhesion invalid?
CONTRACT OF ADHESION
Is a contract between 2 parties mostly one party will be stronger and other party is weaker and stronger party will make a contract with a zero bargaining power
Contract of adhesion can be invalid or not enforceable in the following cases
· Courts use the “doctrine of reasonable expectation” to invalidate.
Courts will be on a side in a reasonable manner when there is a ambiguity, and it is resolved in the favour of weaker party.
· On the basis of nature agreement
If agreement is all in the favour of stronger party it can be void at the option of parties to the contract
· Lack of notice
Notice of communication should be done in specific date as mentioned by the law, the stipulation of dates may taken in to void
· Unequal bargaining power
In this contract if the bargaining power is with one party and it may lead to void the contract.