Introduction to Adhesion Contracts and Property Rights
Adhesion contracts, characterized by unequal bargaining power and non-negotiable terms, often raise concerns about fairness and enforceability. When such contracts involve deceit, constructive fraud, malfeasance, or deceptive practices, they challenge fundamental principles of contract and constitutional law. This article examines the interplay between adhesion contracts, property as defined in the “bundle of rights” theory, and the Fifth Amendment’s Takings Clause, while exploring broader implications for justice and equity.
Property is defined as follows;
property (14c) 1. Collectively, the rights in a valued resource such as land, chattel, or an intangible. • It is common to describe property as a “bundle of rights.” These rights include the right to possess and use, the right to exclude, and the right to transfer. — Also termed bundle of rights. 2. Any external thing over which the rights of possession, use, and enjoyment are exercised <the airport is city property>.
“‘Property (from the Lat. proprius, meaning belonging to one; one’s own) signifies, in a strict sense, one’s exclusive right of ownership of a thing.’ In their strict meanings, therefore, the right of ownership and property are synonymous, each term signifying a bundle or collection of rights. In a secondary meaning, however, the term ‘property’ is applied to every kind of valuable right and interest that can be made the subject of ownership, and in this sense, since it is the subject of ownership, land is called property. The term, therefore, includes both real and personal property, and it is often thus expressly defined in statutes. The word ‘property,’ however, may have different meanings, under different circumstances, according to the manner in which it is used.” William L. Burdick, Handbook of the Law of Real Property 2–3 (1914) (citations omitted).
“In its widest sense, property includes all a person’s legal rights, of whatever description. A man’s property is all that is his in law. This usage, however, is obsolete at the present day, though it is common enough in the older books … In a second and narrower sense, property includes not all a person’s rights, but only his proprietary as opposed to his personal rights. The former constitute his estate or property, while the latter constitute his status or personal condition. In this sense a man’s land, chattels, shares, and the debts due to him are his property; but not his life or liberty or reputation … In a third application, which is that adopted [here], the term includes not even all proprietary rights, but only those which are both proprietary and in rem. The law of property is the law of proprietary rights in rem, the law of proprietary rights in personam being distinguished from it as the law of obligations. According to this usage a freehold or leasehold estate in land, or a patent or copyright, is property; but a debt or the benefit of a contract is not … Finally, in the narrowest use of the term, it includes nothing more than corporeal property — that is to say, the right of ownership in a material object, or that object itself.” John Salmond, Jurisprudence 423–24 (Glanville L. Williams ed., 10th ed. 1947). PROPERTY, Black’s Law Dictionary (12th ed. 2024)
Property is not the tangible item, it is the rights and interest in the item or thing. Thing is defined as;
thing (bef. 12c) 1. The subject matter of a right, whether it is a material object or not; any subject matter of ownership within the sphere of proprietary or valuable rights. • Things are divided into three categories: (1) things real or immovable, such as land, tenements, and hereditaments, (2) things personal or movable, such as goods and chattels, and (3) things having both real and personal characteristics, such as a title deed and a tenancy for a term. The civil law divided things into corporeal (tangi possunt) and incorporeal (tangi non possunt). La. Civ. Code art. 461.
“The terms ‘persons’ and ‘things’ occur very frequently in law, and it is necessary to try to get some idea of what we mean by them. I will first deal with the term ‘thing.’ In its narrowest and strictest sense a thing is a permanent sensible object other than a person. But it is sometimes used to denote any object real or imaginary about which we can speak or think. To its use in this extended sense there can be no objection provided it be understood that we cannot give physical attributes to imaginary objects.” William Markby, Elements of Law Considered with Reference to Principles of General Jurisprudence § 125, at 78 (5th ed. 1896). THING, Black’s Law Dictionary (12th ed. 2024)
The thing could be the house, the car, the phone, and/or the person. As you can see in the explanatory statement un the definition of thing it mentioned “the terms ‘persons’ and ‘things’.” A person can be anything like an individual. in 22 USC 3102 person ” means any individual, branch, partnership, associated group, association, estate, trust, corporation, or other organization (whether or not organized under the laws of any State), and any government (including a foreign government, the United States Government, a State or local government, and any agency, corporation, financial institution, or other entity or instrumentality thereof, including a government-sponsored agency)
What makes this interesting is Statutory Interpretation and the Principles that govern this. One of those principles is called Ejusdem Generis. This is defined as;
ejusdem generis (ee-jəs-dəm jen-ə-ris also ee-joos- or ee-yoos-) [Latin “of the same kind or class”] (17c) 1. A canon of construction holding that when a general word or phrase follows a list of specifics, the general word or phrase will be interpreted to include only items of the same class as those listed. • For example, in the phrase horses, cattle, sheep, pigs, goats, or any other farm animals, the general language or any other farm animals — despite its seeming breadth — would probably be held to include only four-legged, hoofed mammals typically found on farms, and thus would exclude chickens. — Also termed Lord Tenterden’s rule. Cf. EXPRESSIO UNIUS EST EXCLUSIO ALTERIUS; NOSCITUR A SOCIIS; RULE OF RANK. 2. Loosely, NOSCITUR A SOCIIS.
“Of these canons, ejusdem generis, still occasionally applied today, provides that when a list of specific words is followed by a broader or more general term, the broader term is interpreted to include only potential members of a class similar to those denoted by the specific words. An example from the sixteenth century is the Archbishop of Canterbury’s Case, in which the King’s Bench used the principle in interpreting a statute that contained a list of ‘inferior’ means of conveyance, followed by the phrase ‘or any other means.’ Even though ‘any other means’ would seem to include all other types of conveyance, the court limited this catchall phrase to other inferior means of conveyance, and held that it did not include a superior conveyance by an act of Parliament. Obviously, these canons or maxims presuppose both a careful drafting of the text and a close reading by the judges interpreting it.” Peter M. Tiersma, Parchment Paper Pixels: Law and the Technologies of Communication 152 (2010). EJUSDEM GENERIS, Black’s Law Dictionary (12th ed. 2024)
Under the rule of like kind, yes, you can own a person when it is a fiction of your creation. Like an LLC, corporations, trusts, etc., etc.. So if your rights and interests are your property, and it is your rights and interest in a thing or person, you have to ask, can you rights and interests be taken without just compensation? That is what this article is questioning.
Fifth Amendment Just Compensation Clause and Its Scope
1. The Constitutional Foundation of Just Compensation
The Fifth Amendment prohibits the taking of private property for public use without just compensation (U.S.C.A. Const. Amend. V). This principle ensures fairness not only to the property owner but also to the public, emphasizing the equitable balance necessary in government takings (U.S. v. Commodities Trading Corp., 339 U.S. 121 (1950)) .
2. Triggers for Just Compensation
The requirement for just compensation arises whenever private property is taken, whether by formal condemnation, physical invasion, regulation, or occupancy (San Diego Gas & Elec. Co. v. City of San Diego, 450 U.S. 621 (1981)). Compensation must be just for both the owner and the public, typically evaluated through the property’s fair market value at the time of the taking (United States v. 8.929 Acres of Land in Arlington County, Virginia, 36 F.4th 240 (2022)) .
3. State and Federal Procedures for Just Compensation
Historically, the Supreme Court in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), required property owners to exhaust state procedures before filing a Fifth Amendment claim. This requirement was overruled in Knick v. Township of Scott, Pennsylvania, 588 U.S. 180 (2019), where the Court held that a property owner has a federal constitutional right to compensation at the time of the taking, irrespective of state procedures .
Fraud, Adhesion Contracts, and Just Compensation
4. Fraud and Deceptive Practices
Adhesion contracts involving deceit, constructive fraud, or malfeasance complicate the determination of just compensation. Fraudulent practices undermine the legitimacy of the agreement and raise questions about whether compensation can truly be fair. Even in such cases, the compensation must reflect the fair market value and consider the fraudulent circumstances (27 NCAC Rule 1.00) .
5. Bankruptcy and Fraudulent Transfers
Under federal bankruptcy law (11 U.S.C.A. § 548), fraudulent transfers—those made with intent to hinder or defraud creditors or for less than reasonably equivalent value—can be voided. This reinforces the importance of fairness and just valuation in property transactions and is relevant to fraudulent adhesion contracts .
Equitable Principles in Just Compensation
6. Equity and Fairness in Takings
The constitutional requirement for just compensation derives from equitable principles and property law concepts (Almota Farmers Elevator & Warehouse Co. v. U.S., 409 U.S. 470 (1973); U.S. v. Fuller, 409 U.S. 488 (1973)). Just compensation must reflect the fair market value and consider the circumstances of the taking to ensure fairness to the property owner .
7. Temporary and Permanent Takings
Courts have recognized that temporary takings—those that deny landowners all use of their property for a limited time—are no different in kind from permanent takings when it comes to the need for compensation. For instance, in First English Evangelical Lutheran Church of Glendale v. Los Angeles County, Cal., the Court emphasized the burden placed on property owners during temporary deprivations, which also require just compensation .
Legal Implications of Deceit and Fraud in Adhesion Contracts
Fraudulent practices in adhesion contracts amplify the challenges of determining just compensation. While such disputes typically fall under contract law, they may invoke Fifth Amendment protections when government involvement is present. The fraudulent acquisition of property must still result in fair and just compensation, as mandated by constitutional principles, even when deceptive practices have occurred.
Conclusion
The Fifth Amendment’s Takings Clause and its interpretation in cases involving adhesion contracts underscore the importance of equity, fairness, and procedural rigor. Fraudulent practices in such contracts complicate legal determinations, requiring careful consideration of the interplay between contract and constitutional law. The evolving legal framework, as clarified in cases like Knick v. Township of Scott, ensures that property owners’ rights are protected while maintaining fairness in government actions and public policy.
By addressing these issues through both state and federal procedures, courts reaffirm the foundational values of justice, fairness, and public accountability.