Sei sulla pagina 1di 1

Name: OMAR KHAN LBS HOMEWORK SHEET Name of Case in Proper Legal Citation Format Jones v.

Star Credit Corp 59 Misc.2d 189 (1969) Who is/are the plaintiff(s) (i.e. consumer, company, employee, government) and what type of legal relief is/are the plaintiff(s) seeking? Plaintiffs who are welfare recipients agreed to purchase a freezer for $900, and purchase price came out to be $1234.80 with all the other added taxes. So far the plaintiffs have paid $619.88, however the freezer is only worth about $300. What legal question must the court decide, and what is the common law rule, constitutional provision or statute that the question will turn on? Can this transaction and the resulting contract be considered unconscionable within the meaning of UCC 2-302 based on the price that was charged by the plaintiff? In other words, can gross inadequacy between an item's value and its purchase price be used by courts to determine the unconscionability of a contract? What is the courts reasoning? The Court ruled that under the circumstances of this case, the sale of a freezer unit having a retail value of $300 for $900 ($1,439.69 including credit charges and $18 sales tax) is unconscionable as a matter of law. Common law 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. By ruling in favor of Jones, the Court implies that the government should look out for the uneducated and often illiterate individual who is the victim of gross inequality of bargaining power, usually the poorest members of the community. In a contract with a buyer and seller, there is a significant information gap where the buyer may not know the market value of a good. The seller may then easily take advantage of the buyer and overcharge a significant amount. Such deception is thus not permitted under law when in favor of the petitioner (Jones). This ensures that sellers will offer a much more competitive and fair price. Public policy dictates that uneducated consumers should be protected from greedy merchants and the dangers of unequal bargaining power. UCC Section:2-302 provides for a moral sense of community in commercial transactions and if a clause of a contract is unconscionable at the time it was made, the court may refuse to enforce the contract. The UCC applies to the price term of a contract. There is a public necessity and desirability for installments sales contracts. However, the pricing scheme on such contracts must afford some protection to the seller for the risk of selling to those who may default on payment. The price terms set in the subject contract are in excess of any assurances and the result is an unconscionable contract. What is the precedent The court sees UCC Section:2-302 as applying to the price term of a contract. The purpose of Section:2302 is to protect the unequal bargaining power that is often inherent in some contractual agreements.