Williams v. Walker-Thomas Furniture Co. United States Court of Appeals 1965 1) Facts a) Plaintiffs all entered into installment contracts with Defendant for the purchase of household goods. Plaintiffs were relatively unsophisticated buyers who, at the time of purchase, had little monthly income. The installment contracts contained boiler plate language which stated “all payments now and hereafter made by [purchaser] shall be credited pro rata on all outstanding leases, bills, and accounts due the Company by [purchaser] at the time each such payment is made.” The effect of this provision was to keep a balance on all items ever purchased under installment by Plaintiffs, so that if Plaintiff defaulted on payment, Defendants would have the ability to repossess each item, regardless of how much had actually been paid off, because each item would have an outstanding balance due until all items were paid off. The lower Court dismissed the case on the grounds that there was no statutory authority to provide protection to Plaintiffs in situations such as these. 2) History a) The defendant moved for replevy of all items b) The court of General Sessions granted judgment for defendant c) The DOC Court of Appeals affirmed 3) Issue a) Was the contract as a matter of law unconscionable i) When there is an element of unconscionablility then the contract is not enforceable. This usually occurs when one party has an unreasonably favorable contract whether by choice or negligence ii) The contract must be remanded and a test applied to the facts to see if the contract is unconscionable at the moment of creation 4) Judgment: Reversed and Remanded