Which term refers to the principle that either a party must accept or decline all terms of the contract?

The principle that a party must accept or decline all terms of a contract is known as a contract of adhesion. This type of contract is typically drafted by one party, which holds more power in the negotiation process, and is presented to the other party on a take-it-or-leave-it basis. In such cases, the accepting party does not have the opportunity to negotiate individual terms; they can either accept the entire agreement as is or reject it altogether.

Contracts of adhesion are often seen in standard form agreements where one party, such as an insurance company, offers a contract to a consumer with little or no room for negotiation. This principle underscores the importance of fairness and transparency in contracts, particularly in consumer agreements, as it addresses the balance of power between the two parties involved. It ensures that consumers are aware that they cannot modify terms and must consider the contract in its entirety when making a decision.

Understanding this principle is crucial in the context of life insurance and other insurance products, as consumers should be aware that they must fully accept the conditions set by the insurer without the ability to negotiate alterations.