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.
This body of laws recognizes the importance of a free enterprise system but at the same time will provide the legal armor to protect and safeguard the prospective victim from the harshness of an unconscionable contract.View Full Point 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.