Which characteristic describes a contract of adhesion?

A contract of adhesion is typically characterized by the imbalance of power during its formation, where one party drafts the terms and the other party has little to no ability to negotiate those terms. This is commonly seen in scenarios where a company provides a standard form contract that must be accepted in its entirety, without any modifications. Because the terms are established by one party, it often places them in a position of greater power over the other party, who may be compelled to accept the contract as is, particularly in consumer transactions. This imbalance is what distinctly identifies contracts of adhesion.

The other options do not accurately describe the nature of a contract of adhesion. For instance, while such contracts are often binding for both parties, this characteristic is not exclusive to contracts of adhesion. Furthermore, mutually negotiated terms would imply a degree of negotiation power for both parties, which contradicts the adhesive nature. Lastly, while some contracts may be non-transferable, this is not a defining trait of adhesion contracts, as they can often be transferred unless specified otherwise.