The article attempts to argue that contracts of adhesion do not conform to the notion of autonomy that underlies the choice of law by the parties and is incompatible with the principle of mutuality on which the power of the parties to make the choice of applicable law rests. The main theme of the article is to suggest that the choice of law clause in contracts of adhesion shall not take effect (although the clause may not necessarily be invalid), unless and until the other party (adherent) meaningfully agrees or a court scrutinizes the contract for the true assent of the adherent. The article proposes and advocates a “second chance” approach for the contractual choice of law in contracts of adhesion in order to protect the adherents’ interest that otherwise would be adversely affected. Part II of this article begins with an analysis of the autonomy in selecting the governing law for the contract and also discusses the mutuality that is needed in the process of choice of law by the parties. Part III focuses on one-sided scenarios of contracts of adhesion, particularly the cohesive “wrap” agreements, and their incompatibility with mutuality-based autonomy in contractual choice of law. Part IV provides a critical view of the doctrines employed by courts in the United States to deal with contracts of adhesion, with a focus on the issue as to whether those doctrines would, to the extent that the parties’ assent is truly expressed, help ensure the autonomy that the parties are supposed to have in making a choice of law in contracts of adhesion. In Part V, the article addresses why adherents should have a “second chance” against an adhesive choice of law clause, and how the “second chance” is to be exercised. The article concludes in Part VI by pointing out that given its uniqueness, the choice of law issue should be coped with separately from other parts of the contract. The basic argument is that for contracts of adhesion, though the time may not yet be ripe for a set of new rules to police the choice of law clause, adherents should not necessarily adhere to the choice of law made by the other party, but rather should be given a second chance to really make a choice, namely to either agree or disagree. Thus, as a general rule, a choice of law clause in an adhesion contract shall be presumed ineffective; and thus, unenforceable unless the adherent’s true assent is confirmed.
"Contractual Choice of Law in Contracts of Adhesion and Party Autonomy,"
Akron Law Review: Vol. 41:
1, Article 1.
Available at: https://ideaexchange.uakron.edu/akronlawreview/vol41/iss1/1