What type of contract is formed when one party makes an offer and the other party cannot change the terms?

The correct answer is Contract of Adhesion. This type of contract is characterized by one party presenting the terms to the other party, typically in a "take it or leave it" manner, where the second party has little to no ability to negotiate the terms of the agreement.

In these contracts, the party offering the contract usually has greater power or resources, which is common in situations involving insurance policies, standard form contracts, or agreements where one party is at a negotiating disadvantage. The essence is that the terms are set and non-negotiable, often reflecting standard provisions that the stronger party has set up.

Understanding this type of contract is essential, especially in the context of insurance and other industries where consumers may have limited ability to alter the conditions laid out by the provider. This highlights the importance of reading and understanding the terms fully before agreeing, as they may significantly favor the party who drafted them.