Vail Daily column: Adhesion contracts | VailDaily.com

Vail Daily column: Adhesion contracts

We've all been through the drill. The excitement of buying a new home — or a new car, or any number of new things — is tempered by the heap of paper stacked before you when you go to finalize the thing, like Jack's proverbial beanstalk reaching to the sky.

Incredulous, you say something like, "Am I really supposed to read all of this?" to the closing agent, "let alone try and understand it?"

This is not her first rodeo. She nods sympathetically. "I can try to explain it," she offers patiently. She reaches for the first page of what is a very tall stack and begins, "This one…"

"No, no," you say. "I'll just sign it!"

The ploy works perfectly; both of you know that had she gone through the papers one-by-one in all of their excruciating detail, what has already been a long day would have stretched into the next dawn. And, even then, you would not have understood this mess one whit, jot or particle better. She knits her fingers together, monk-like beneath her chin, and bats her doe-like eyes at you.

You begin to scribble frantically, page after endless page, muttering things like, "Do lawyers even understand all of this gobbledygook?" or "Who thinks up this stuff?" or "Maybe if my signature is messy, they'll never be able to pin this thing on me!"

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When you're finally done — your hand seized with a writer's cramp — you find yourself wondering if you have just signed away your firstborn or your soul or more income than you have any right to believe you might possibly earn in the remainder of your natural life. You think of moving to Vanuatu or some other lonely little dot in the Pacific where the rhythms of life are slower.

Welcome, son or daughter, to the wonderful world of adhesion contracts. Yes, adhesion, like glue, like oh-my-God, now I'm really stuck!

Same as the air we breathe, adhesion contracts are everywhere. They are in the Maytag financing agreement we have put ink to, to the insurance agreements that the insurance conglomerates will try and squirm out of if we ever need them, to the mortgage you just signed, to the terms of payment for Junior's tuition, to more kinds of things that the human imagination can conceive.

What, then, is this Leviathan that consumes us in a huge, rapacious, callous gulp?

An adhesion contract may be defined as an agreement between two parties in which one side has all the bargaining power and uses it to write the contract primarily to his or her advantage. Adhesion contracts are basically take-it-or-leave it, my way or the highway. Next time you have an inkling to tweak an insurance contract, see how that is received.

"You want to what?"

"I was thinking that maybe we could haggle the terms just an itsy…"

If the agent has a sense of humor, maybe she will laugh. Or maybe, she will throw you out on your ear. What she will not do is agree. Maybe if you're as big a Midas as Warren Buffet or Bill Gates they might give a little—after all, the power between the two of you would even out a bit—but don't count on it. What you'd likely get instead is, "Mr. Buffet, we don't bargain," where the word "bargain" is laced with disdain. "There are plenty of other insurance companies who I am sure would be pleased to do business with you." And with that, the door would swing on its hinges to show you the way out.

Adhesion contracts fail to give consumers a realistic opportunity to negotiate terms. As such, the consumer cannot obtain the desired product or service unless he acquiesces to the form agreement.

While this seems gross, unfair, and would certain have uncle Bernie Sanders' undies in a bunch, there is nothing unenforceable—or even necessarily wrong—about adhesion contracts. Most businesses would never conclude their volume of transactions if it were necessary to negotiate every term of every contract with every consumer and keeping track of them would be a nightmare. If your insurance contract was different than mine which was different than every one of our Vail Valley neighbors, keeping track of whose said what and what promises were made to whom would keep fleets of lawyers punching their overtime cards.

But wait, there's more…

Just because they may be valid does not mean that all adhesion contracts, in fact, are valid. Where an adhesion contract rises to the level of unconscionability, it may be void and a court may simply turn its back on it and refuse to enforce it. One example might be in cases when there is a severe or unusual penalty for failure to pay loan installments on time, particularly where the damning provision is hidden in teensy print located in the middle of an obscure paragraph of a lengthy loan agreement. In such circumstance, a court may find that there was no "meeting of the minds" of the parties to the contract and that the weaker party has therefore not "accepted" the terms of the contract.

But here's a final rub.

In order to try to void the contract, odds are you will have to take the corporate monster to court. And — news flash here — because they earn in a millisecond what your lifetime earnings are, they can likely afford it more than you. When you begin your march court armed with your pop gun, chances are your rival's field will be arrayed with the latest and greatest in legal armaments.

Life ain't fair.

Oy vey!

Rohn K. Robbins is an attorney licensed before the bars of Colorado and California who practices in the Vail Valley with the law firm of Stevens, Littman, Biddision, Tharp and Weinberg LLC. His practice areas include business and commercial transactions, real estate and development, family law, custody, divorce and civil litigation. Robbins may be reached at 970-926-4461 and at either of his email addresses, robbins@slblaw.com and robbins@colorado.net.