Contracts I, Pages 514–519

Williams v. Walker-Thomas Furniture Co.

United States Court of Appeals District of Columbia Circuit, 1965

Facts:

Plaintiff operates a furniture store, from which defendant purchased a number of items on credit. The terms were in a print form contract which stipulated the monthly rent payment and that the items would remain plaintiff's property until the payments made equaled the value of the item. An additional clause kept a balance, and therefore ownership over every item until all items had been paid off.

Defendant Thorne purchased six items of furniture for $391.10. He then defaulted and plaintiff sought to replevy all the items purchased for the last four years. Defendant Williams bought a stereo worth $514.95. She too defaulted and plaintiff sought to replevy all items she had bought in the last five years.

Procedural History:

Trial and appellate courts held that they were not unconscionable, believing they had no authority to say that it was.

Issue:

Was the clause keeping a balance on past purchases unconscionable?

Defendant's Argument:

These contracts are unconscionable and hence not enforceable.

Rule:

The test is whether the terms are "so extreme as to appear unconscionable according to the mores and business practices of the time and place," in light of the circumstances existing when the contract was made.

Reasoning:

The lower courts did not assess unconscionably.

Judgment:

Remanded.

Dissenting Opinion:

People may need items on credit, and this is how businesses sustain themselves with a degree of protection. We should thus be cautious in the absence of a law prohibiting such conduct.

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