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Are Credit Card Agreements "Adhesion Contracts"?

Woodland Hills, CA |

My trial was today and and when I stated in judges chambers prior to the trial that I believed credit card contracts are adhesion contracts the judge snapped at me that the judge had gone to law school and knows what adhesion contracts are and that credit cards are not adhesion contracts because I was free to go to any other credit card company. When I pointed out that all the credit card agreements are basically the same, the judge just scoffed.

Isn't this twilight zone territory? Is the judge right in believing that credit card agreements are not adhesion contracts?

Attorney Answers 4

  1. Contracts of adhesion are basically take it or leave it agreements. Since your credit card is issued with an agreement to which you did absolutely no negotiation, then yes, technically, credit cards are adhesion contracts. I have heard the argument made just as your judge did, and I respectfully disagree. Just about every legal definition of adhesion contracts indicates that such a contract exists when terms are not negotiated and are provided "take it or leave it."

    Advice on this forum is for informational purposes only and should never be mistaken as a substitute for legal advice. If you are in need of legal advice, you should consult local legal counsel.

  2. No, generally speaking, credit card agreements as a whole are not adhesion contracts because there are numerous credit card companies that offer credit cards. If you do not agree to a particular credit card provider's terms, you do not have to agree.

    Even assuming that the particular credit card agreement is determined by the court to be an adhesion contract, the determination that a contract is adhesive is merely the first step that courts take in deciding whether to enforce such contract.

    Frank W. Chen has been licensed to practice law in California since 1988. The information presented here is general in nature and is not intended, nor should be construed, as legal advice for a particular case. This posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult with your own attorney.

  3. I do not think there is any question that a typical credit card contract is one of adhesion. Regardless, that is not likely to get you anywhere, especially with this judge. So, if you are representing yourself, it may be time to come up with a better argument in defense of your alleged obligation.

  4. It is a binding contract. The terms are similar because the credit card companies want all of their cards to be governed by the same contract. Also, many of the provisions are required by law.

    The contract is not unenforceable as an adhesion contract. However, if any of the terms are ambiguous, or contrary to law, you can argue the validity of such terms.

    You argument with the judge is just a waste of time for both of you. If you have a better defense, argue your best defense. You would be better off getting an attorney to represent you in court.

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