ProfessorMelissa A. Hale
CaseCast™ – "What you need to know"
Brief Fact Summary. Plaintiffs, welfare recipients, purchased a home freezer worth $300 for $900 from a door-to-door salesman. After various other charges, the total purchase price was $1,234.80. At the time of the lawsuit, Plaintiffs had paid $619.88 and still owed $819.81 on the freezer.
Synopsis of Rule of Law. A purchase price substantially higher than the value of an item can render the sale unconscionable as a matter of law.
Issue. Is the sale of a freezer unit having a retail value of $300 for $900 unconscionable as a matter of law?
Held. Yes. The mathematic disparity between $900 and $300 is the most compelling evidence leading to the conclusion that the contract is unconscionable. Additionally, the credit charges alone exceeded the value of the freezer by more than $100, and the seller knew that the financial resources of the buyers were limited.
Discussion. The determination of whether a contract is unconscionable should not be reduced solely to a mathematical formula, but on the facts before the court here, paying $900 for a $300 freezer constituted an unconscionable contract.