Contracts

Brief

Jones v. Star Credit Corp.

Procedural History:

• N.Y. Supreme Court rules for Jones.

Facts:

• Plaintiffs agreed to purchase a home freezer for $900.
  • With additional charges, the total price comes to $1,234.80.
• The plaintiffs are recipients of welfare.
• The plaintiffs have paid $619.88 toward the freezer thus far.
• The evidence at trial proved that the freezer had a retail value of only $300.

Issue:

• Whether this transaction and the resulting contract should be considered unconscionable within the meaning of U.C.C. 2-302?

Holding:

• Yes.

Reasoning:

• The 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.
• The mathematical disparity in prices make this case obvious.
• Also considered is the fact that the sellers knew of the buyers limited financial resources.
• The retail merchant selling on installment or extending credit is expected to establish a pricing factor which will afford a degree of protection commensurate with the risk of selling to those might be default prone.