Senior Exploitation by Contract

You might agree with me that one of the most annoying experiences these days is when someone plants a contract before your eyes when you least expect it, in a situation where you have little time to reverse course on the transaction. In law, these are termed "contracts of adhesion." Practically, they are not contracts at all, but rather one party's act of taking advantage of the situation to the detriment of the other party.

I recently had this problem during a visit to a major medical center in the Main Line. After driving miles to reach the medical center, I parked my car, walked a block or two, and entered the building. I checked in at the reception desk and provided all the information necessary for their billing. I walked to the doctor's office and checked in. After disrobing as necessary, I had a brief conversation with the nurse where we reviewed what was about to take place. Then, at the last moment, just before we began the procedure, a computer tablet was placed before my eyes and I was asked to consent in writing to a long contract. I had to take their word about what I was signing because I never had the opportunity to read it. Indeed, I was presented with the tab even though my eyeglasses had already been removed. I wondered why I wasn't given this information beforehand so I could honestly evaluate what I was signing and discuss it with the doctor.

How many times do we take for granted what somebody is telling us that we are signing? As a lawyer, I actually read the document. Many times it doesn't explain what you are signing, and when you ask the clerk, neither do they! Examples are the paper that you sign after service at one of the nearby major oil change services or the paper you sign after you receive tire service at one of the big box retail chains, or perhaps at your major car dealership for warranty repair service. In each case, your signature is requested but the document does not even explain what you are agreeing to or signing for!

Usually, only lawyers see the unjust outcome of these acts, either in published court opinions or meetings with people who call for help. One obstacle to reform is centuries of contract law authorizing this kind of conduct. Also, courts don't want to interfere in private transactions. Almost every session the federal Congress tries to pass a law that limits the use of those contracts of adhesion, but so far, a law is not been passed.

Slowly, Pennsylvania courts are reversing course in some cases. I mentioned in a previous article that Pennsylvania Courts stated that consumers may not be held to confusing contracts and may obtain reimbursement of attorney fees if they are damaged by the contract. You should also note that most limits or waivers of liability appearing on the reverse side of dry cleaning tickets or parking lot tickets are not enforceable because they are not contracts that you signed or agreed to. It must be brought to your attention and you must agree to it before you may be held liable.

If you receive some kind of a standardized contract on an essentially "take it or leave it" basis without any real opportunity to bargain, and under such conditions that you cannot obtain a desired product or service except by acquiescing to the contract, then it is a "contract of adhesion." Courts will enforce it unless it is "unconscionable" and that is a question for the court. Whether a court will hold the contract as unenforceable depends upon the court and the facts of the case. In a recent case decided last December of 2020 our local Federal District Court held that part of a contract between Vision Academy Charter school and an employee, Shonte Watkins, was a contract of adhesion because Mr. Watkins had little bargaining power over its terms. Nevertheless, the court held that only one part of the contract could not be enforced because it was unconscionable, but another part of the contract could still be enforced! So, while Mr. Watkins could not be forced to pay for arbitration, an arbitration clause in his employment contract was upheld.

What do you do when exploited by such a contract? You can simply refuse to sign, and walk away. I did that once in a dental office when the contract was six pages long. Under the Uniform Commercial Code § 1-308, in contracts for goods, you can write something like “without prejudice” or “under protest” in an acceptance of a contract to make it clear that you are reserving your legal rights. The exact words of the statute are: § 1-308. Performance or Acceptance Under Reservation of Rights: (a) A party that with explicit reservation of rights performs or promises performance or assents to performance in a manner demanded or offered by the other party does not thereby prejudice the rights reserved. Such words as "without prejudice," "under protest," or the like are sufficient.

This does not mean that you are not bound by any terms of the contract. It only means that you have not waived any rights to challenge the terms of the contract in a court of law. You might make it look as close to your signature as possible, but you cannot give the impression that you have accepted the contract. Chances are the employee on the other side will neither read nor question the signature. It will not work to prevent you from paying for some goods or other benefits you received under the contract because you are still responsible under a term such as "quantum meruit," and you might even be charged with theft if you refuse to pay. It may reserve your right to contest some contract provisions if a problem ever arises.

The best solution? Either legislation or judicial precedent outlining facts making contract of adhesion unconscionable. Until then, pay attention to how you sign, or don't sign at all! Several more posts are planned on this topic. Be sure you are subscribed so you do not miss any of them.

tags: legal