standard contract
A standard contract is a pre-drafted agreement that is prepared in advance by one party for repeated use in multiple transactions involving different counterparties. Standard contracts streamline contracting by using uniform terms, reducing negotiation time, and promoting consistency across similar transactions. They are often used in consumer transactions, employment agreements, insurance policies, real-estate forms, and commercial settings.
Standard contracts typically contain fixed terms that apply to all customers or counterparties, though parties may sometimes negotiate some provisions depending on the context and relative bargaining power. Unlike individually negotiated contracts, standard contracts are designed to be reused with minimal modification.
A standard contract may become an adhesion contract when it is offered on a take-it-or-leave-it basis and the receiving party has no meaningful opportunity to negotiate the terms. However, not all standard contracts are adhesion contracts. When both parties have relatively equal bargaining power, standardized contracts are used to simply reduce transaction costs, streamline repeat transactions, and provide predictable terms. Standard contracts support efficiency but may be subject to doctrines such as reasonable expectations, contra proferentem, and unconscionability when fairness concerns arise.
[Last reviewed in November of 2025 by the Wex Definitions Team]
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