Question

Which statement is CORRECT when describing a contract of adhesion?

1) contract may be accepted or rejected by the insured
2) contract involves negotiation between insurer and insured
3) Any confusing language in the contract would be interpreted in favor of the insurer
4) contract cannot be modified by the insurer

Answer 1

The correct statement that describes a contract of adhesion is that any confusing language in the contract would be interpreted in favor of the insurer.

Step-by-step explanation:

The correct statement that describes a contract of adhesion is option 3: Any confusing language in the contract would be interpreted in favor of the insurer. A contract of adhesion is a standardized contract where the terms are not negotiable and are imposed by one party, typically the insurer, on the other party, usually the insured. These contracts often contain complex language and provisions, and any ambiguities or uncertainties are construed against the party that drafted the contract, in this case, the insurer. This principle is known as the doctrine of contra proferentem.