Williams v. Walker-Thomas Furniture Co.
US COA DC - 1965 (350 F.2d 445)
- D purchased a number of household items form D, for which payment was to be made in installments. The titles for the purchased items would remain with D until the total of all of the monthly payments equaled the stated value of the items.
- There was a provision in the contract which gave P the right to repossess all items bought by their customers if the customer defaulted on a payment.
- In 1962, D bought items from P. Upon default, P sought to repossess all items the D had bought and paid for since 1958.
- Lower court found for P, contract enforceable.
- DC COA affirmed, found for P, contract enforceable.
- US COA DC found for D, remanded to trial court.
- Can a contract we invalidated due to unconscionability?
- If unconscionability is present at the time a contract is formed, the court can choose not to enforce the contract.
- In other jurisdictions, it has been held as a matter of common law that unconscionable contracts are not enforceable.
- Congress has enacted the UCC. UCC 2-302 provides that the court may refuse to enforce a contract which it finds to be unconscionable at the time it was made.
- When a party of little bargaining power, and hence little real choice, signs a commercially unreasonable contract with little or no knowledge of its terms, it is hardly likely that consent was ever given to all the terms.
- Corbin suggests that the test should be whether the terms are so extreme as to appear unconscionable according to the mores and business practices of the time and place.
- The law has always granted parties latitude in making their own contracts.
- This decision will affect a great number of seemingly valid installment plan contracts.
- Unconscionability involves the evaluation of four factors…
- The relative harshness of the term in question, including the importance of the legal right that is affected
- The manner of presentation of the term in the agreement
- The relative bargaining power of the party against whom the term is asserted
- The commercial justification for the term