Contract Templates: False Sense Of Security?

Are Your Template-Based Contracts Enforceable?
If a supplier signs your contract, that supplier is legallybound to the obligations within that contract, right? Beforeyou answer, let's talk about adhesion contracts.
An adhesion contract, defined in Jones v. Dressel, 623 P.2d370, 374 (Colo. 1981), is a contract "drafted unilaterally bya business enterprise and enforced upon an unwilling and oftenunknowing public for services that cannot readily be obtainedelsewhere. An adhesion contract is generally not bargainedfor but is imposed...on a take-it-or-leave it basis."
So adhesion contracts are like those you accept when you parkyour car and receive the claim check which purports to waiveyour rights. Pre-printed forms. Small print. You’veundoubtedly seen many of them.
According to ReevesJournal.com: "The courts have interpretedand enforced adhesion contracts differently from ordinarycontracts - the provisions buried in the contract have beenfound to unexpectedly and often unconscionably limit theobligations and liability of the party drafting the contract."Contracts and clauses within a contract found to beunconscionable are not enforceable. Contracts that are veryone-sided are often considered unconscionable.
Today's supply chain managers regularly use contract templateswith their suppliers. And the templates of larger companies,who are financially stronger than their suppliers, often sharethe characteristics of one-sided adhesion contracts common tothose used between large companies and consumers.
So, could your contract template be unenforceable?
"Forms and templates should always be used cautiously" saidErnest Gabbard, Director of Corporate Strategic Sourcing forAllegheny Technologies and also an attorney. "It is alwaysbest to negotiate and reach agreement on the controversialclauses, to ensure that all elements of the contract areenforceable."
This article is not intended to be legal advice. Laws differbetween states and countries. Always consult an attorney whendealing with contractual matters.