Which contract type is described as terms set by the insurer with little to no negotiation by the insured?

• A. Warranty Contract
• B. Aleatory Contract
• C. Contract of Adhesion
• D. Unilateral Contract

Answer: (C)

Contracts where one party writes the terms and the other has little opportunity to bargain are adhesion contracts. In insurance, the insurer provides a standard form policy with prewritten terms and conditions. The insured essentially accepts those terms as is when purchasing the policy, with minimal room to negotiate individual provisions. This take-it-or-leave-it structure is the hallmark of an adhesion contract.

This differs from a unilateral contract, where only one party makes a promise that is triggered by the other party’s action (not about standard terms). It also isn’t about the event-driven nature of the agreement (aleatory) or about warranties guaranteeing product conditions (warranty contracts). The defining idea here is the insurer’s control over the terms and the limited ability of the insured to haggle.