CASE BRIEF: Chapter: Contracts Avoidance Doctrines Section G: Unconscionability NAME: Williams v Walker-Thomas Furniture CO, United State Court of Appeals District of Columbia (1965) FACTS: (LIST FACTS THAT ARE MATERIAL TO THE COURT’S HOLDING) Appellee – Walker, Appellant (who lost) – Williams - - Appellants entered “rent-to-own” agreement with Appellee (Furniture Co.). Appellee standard contract had a provision that stated each new item a customer would “rentto-own” would be secured with a security interest (a lien) on items previously rented by the customer that were not yet paid off. If a customer defaulted on a payment for any item, then all the items they had rented, but not paid off, could be repossessed by Appellee. appellant received a welfare check in the appellee saw that she was getÝng money yet not paying her due on the furniture, so appellee has the right to take away the things because that was in the agreement PROCEDURE: INSERT PROCEDURAL HISTORY OF THE CASE (E.G P SUED D. TRIAL COURT GRANDED D’S MOTION TO DISMISS. P APPEALED) -Walker sued Williams. Williams lost at trial. Williams appealed, they lost again. Went to US Court of Appeals District of Columbia circuit ISSUE: WHAT QUESTION OF LAW IS THE COURT ASKED TO DECIDE (WHETHER THE TRIAL COURT GAVE THE CORRECT JURY CHARGE FOR___) - Can a contract be unenforceable because of its unconscionability? HOLDING: WHAT IS THE COURT’S ANSWER TO THE QUESTION ABOVE? (NO/YES, THE TRIAL COURT DID NOT ERR WHEN IT GAVE ___) - Yes, the contracts were unenforceable because unconscionability was present REASONING: LIST REASONS WHY THE COURT HELD AS IT DID (RULES, STATUTES, RESTATEMENTS, PUBLIC POLICY REASONS ETC.) Rule: Where the element of unconscionability is present at the time the contract is made, the contract should not be enforced. Rule: Unconscionability has been recognized as: (1) the absence of a meaningful choice by one of the parties; together with (2) contract terms that are unreasonably favorable to the other party. Rule: Whether a meaningful choice exists depends upon, among other things: (1) the gross inequality of bargaining power; (2) the manner in which the contract was entered into; (3) whether each party understood the full effect of the terms of the contract; and (4) whether deceptive sales practices were used. Rule: When determining reasonableness, you must consider the terms of the contract and the circumstances of the parties which existed at the time the contract was made. DISPOSITION: INSERT HOW THIS COURT DISPOSED OF THE CASE (AFFIRMED, REVERSED, OR REMANDED) - Remanded back to the trial court for further proceedings DISSENT OR CONCURRING: INSERT BRIEF DISCUSSION OF ANY DISSENTING OR CONCURRING OPINION - Judge Danaher Dissent o The law for so long has allowed parties to make their own contracts. Because there are thousands of installment credit transactions annually, the majority’s opinion may have a drastic effect on these transactions — and cases arising out of these transactions. (WHAT WOULD THE OTHER SIDE DO)