Illinois Courts Generally Hold Adhesion Contracts As Lawful
An adhesion contract is a standardized form agreement prepared entirely by one of the parties and submitted to another party for acceptance without any opportunity to negotiate terms. Endsley v. City of Chicago, 319 Ill.App.3d 1009, 1019 (1st Dist. 2001). Further, a contract of adhesion is a contract that is offered on a take-it-or-leave-it basis to a party who has no bargaining power and no ability to change the terms of the contract. Wigginton v. Dell, Inc., 890 N.E.2d 541, 546 (5th Dist. 2008). Therefore, a contract of adhesion exists where one party has absolutely no bargaining power or ability to change the contract terms. Hubbert v. Dell Corp., 359 Ill.App.3d 976, 987 (5th Dist. 2005).
Where there is disparity in bargaining power, the drafter may essentially require the other party, or "adherer," to accept or reject the form contract on a "take it or leave it" basis. Illinois Jurisprudence, Commercial Law § 1:4. Whether a contract is one of adhesion is itself a question of fact. Id. Burdensome clauses in adhesion contracts generally should be construed against the drafter of the contract.
Illinois courts have held that contracts of adhesion are generally lawful and "mere disparity of bargaining power is not sufficient grounds to vitiate contractual obligations.” Endsley v. City of Chicago, 319 Ill.App.3d 1009, 1019 (1st Dist. 2001). To vitiate a contractual obligation under an adhesion contract, something more than mere disparity in bargaining power is required. Illinois Jurisprudence, Commercial Law § 1:4. To determine whether a contract of adhesion is enforceable, Illinois courts look to two factors: the reasonable expectations of the adhering party and whether the contract is unconscionable. Hutcherson v. Sears Roebuck & Co., 342 Ill.App.3d 109, 120 (1st Dist. 2003). Thus, Illinois courts may declare adhesion contracts unlawful where the party in the superior bargaining position has taken unfair advantage of the adherer by making the desired product or service available only if the weaker party accedes to the form of the contract. Illinois Jurisprudence, Commercial Law § 1:4. Therefore, unfair advantage is the key to differentiating between lawful and unlawful adhesion contracts. Id.
Contracts of adhesion, typified by terms that are nonnegotiable and presented in fine print in language that the average consumer might not fully understand are not per se unenforceable from a procedural standpoint. Tortoriello v. Gerald Nissan of N. Aurora, Inc., 379 Ill.App.3d 214, 233 (2d Dist. 2008). Some additional coercion or overreaching is necessary. Id. The Illinois First District Appellate Court held that when contracts of adhesion are in a standardized form agreement and are submitted to a party for acceptance without any opportunity to negotiate the terms, the mere fact that one party to a contract enjoyed little relative bargaining strength cannot alone render a contractual provision unenforceable. Larned v First Chicago Corp., 264 Ill.App.3d 697 (1st Dist. 1994). However, a contractual clause that is part of a standardized form agreement may have some of its significance reduced because of the inequality in the parties' bargaining power. Williams v. Illinois State Scholarship Commission, 139 Ill.2d 24, 72 (1990).
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