A contract of adhesion is best described by which characteristic?

• A. It is formed by one party with little opportunity for negotiation
• B. The terms are negotiated at length
• C. The insured can modify terms unilaterally
• D. The contract is voidable at any time

Answer: (A)

A contract of adhesion is a take-it-or-leave-it agreement where the terms are set by one party and the other has little or no opportunity to negotiate. In life insurance, the insurer typically drafts standardized policy forms and the insured must accept the terms as written, with limited room to bargain. This is why the best description is that it is formed by one party with little opportunity for negotiation. The other options describe negotiated terms, unilateral changes by the insured, or broad voidability, none of which capture the essential nature of adhesion contracts.