Summary of Williams v. Walker-Thomas Furniture Co.
United States Court of Appeals, District of Columbia Circuit, 1965.
Facts: Appellants bought furniture from Appellee on credit and the K that they signed contained a provision which stated that the balance will remain due on every item purchased until the balance due on all items, whenever purchases, was liquidated. In case of default of payment, all the furniture on which balance is due will be taken back by the appellee. The appellants bought furniture in 1962 and defaulted on payment. They had also purchased furniture from appellee in 1957 on which they had some payment leftover. The appellee sought to replevy all the items purchased since 1957.
Procedure: The court of General Sessions granted judgment for appellee and the District of Columbia Court of Appeals affirmed.
Issue: 1. Did the court have the power to refuse enforcement of Ks that it found to be unconscionable? 2. Were the terms of the contract in the current case so unfair that enforcement should be withheld?
Holding: 1. Yes 2. Not decided- case remanded for new trial.
Rationale: The lower courts stated that the courts do not have the power to deny enforcement of Ks that are unconscionable. But this court ruled that the courts do enjoy this power. Congress has recently enacted the UCC § 2-302 that specifically provides that a court may refuse to enforce a K which it finds to be unconscionable at the time it was made. Furthermore, courts refusing to enforce such Ks is not a novel concept. The court in Scott v. United States stated that: “If a K be unreasonable and unconscionable, but not void for fraud, a court of law will give to the party who sues for its breach damages, not according to its letter, but only such as he is equitably entitled to…" As far as the K in this case is concerned, a new trial was ordered to determine whether “the terms of the contract are so unfair that enforcement should be withheld."