Williams v. Walker-Thomas Furniture (1965)

Walker-Thomas was a rent-to-own retailer. He considered all payments made by his customers rental payments until the items were paid for in full.

Customer's maintained a cumulative balance of all their items. If a customer purchased a $800 item while still having a $50, then all the customer's purchases would have been regarded as un-paid.

During the period from 1957 to 1962, Ms. Williams had purchased furniture and appliances from Walker-Thomas.

Ms. Williams lost in Williams v. Walker-Thomas Furniture (1964).

Walker-Thomas also sued another customer seeking to re-possess (writ of replevin) "rented" items because these customers hadn't paid in full under the "cover-all provision" that required all items to have been paid for.

The DC Court of General Sessions ruled against the customers including Ms. Williams. Next, the Appellate Court affirms.

Do courts have the power to refuse to enforce unconscionable contracts?

The customers of Walker-Thomas argued that the "cover-all provision" was unconscionable.

Yes. A court may refuse to enforce unconscionable contract provisions.

If one party has a gross bargaining advantage, then the other party has no real choice. If such a party signs a contract, not knowing all the terms of the contract, then it is hardly likely that his consent was given to all the terms.

A contract is unconscionable if it

1. leaves 1 party without a meaningful choice, &
2. includes terms & conditions that unreasonably favor the other party.

The court gave a test for unconscionability: "Are terms so extreme as to appear unconscionable according to the mores and business practices of the time and place?"