The ruling in the Williams v. Walker-Thomas Furniiture Company should be in favor of Williams.
Debate Rounds (4)
Pro Argument- In support of Williams Proving unconscionable
This argument addresses the issue of whether or not the contract in the Williams v. Walker-Thomas case is unconscionable:
1)The appellant Williams, in the Williams v. Walker-Thomas Furniture Co. case was a regular customer of the Walker-Thomas Furniture Company. (511.1.1)
2)From 1957 to 1962 the appellant purchased multiple items at the furniture store (511.1.2).
3)The items were leased to the purchaser and the title remained in the furniture company"s name until all the total payments were made (511.1.3-4).
4)If the purchaser defaulted then the furniture company could repossess the items (511.1.5).
5)Williams purchased a stereo set from Walker-Thomas on April 17, 1957 and defaulted shortly after (511.3.3).
6)The furniture company then attempted to repossess the stereo as well as the previous items which in which Williams purchased as well (511.3.4).
7)The text of the contract contained evidence of complex technical wording (511.2.1).
8)If both parties are not aware of the meaning of the terms within the contract or if they do not understand the meaning of the contract then they have not consented to the terms contained in the contract (512.5.7).
9)If premises (7) and (8) are true then Williams was not aware of the terms within the contract and she did not agree to them.
10)If the understanding of the terms within the contract is questionable then the rule is that the court is to determine if the terms within the contract are so unfair that it should not be upheld (513.1.2).
11)For all of the purchases that Williams made, prior to and including the purchase of the stereo set, the Walker-Thomas Furniture Company had records of her financial information and was aware of her meager financial situations (512.1.6).
12)The back of the contract listed the name of William"s social worker and the amount she received from the government each month (512.1.7).
13)The furniture company was also aware that Williams was the sole supporter of seven children (512.1.8).
14)There is a possibility that the company used Williams financial situation as a strategy to profit from her default because they attempted to repossess all the items that Williams had previously purchased from the company if she defaulted on one of her payments (511.3.4).
15)At the time when Williams signed the contract for the stereo she was receiving $218.00 monthly from the government (513.1.7).
16)Just before Williams signed the contract for the stereo her balance at the store was $164.00 (512.1.3).
17)The total initial value of all the items the Williams purchased came up to $1,800.00 but the total she would be paying the store to gain the title of the items was $14,000.00 (513.9.1).
18)The furniture company held the bargaining power in this transaction (511.1.4).
19)Discretion could be used on the part of the furniture company when repossessing, since the contract stated that in the event of default on any monthly installment Walker-Thomas could repossess the items (511.1.5).
20)Williams did not have meaningful choice in this transaction because if she wanted the stereo then she had to agree to the standard contract (512.5.2).
21)Williams did not understand the terms of the contract and the contract was unfair therefore the contract is unconscionable (513.1.2). The furniture company also had the bargaining power which meant that Williams did not have meaningful choice therefore according to the general understanding of unconscionability this contract is unconscionable (512.5.1).
The Walker-Thomas Furniture Company"s contract is unconscionable because Williams did not comprehend the full meaning of the terms contained in the contract and the circumstances surrounding the transaction of the case was unfair. Although the company was aware of Williams unfavorable financial situation they still sold the stereo to her which showed irresponsible business dealings on the part of the Furniture Company as well as an attempt to exploit financially unstable victims such as Williams. Since the contract was standard it negated the meaningful choice that the purchaser should have. The furniture company had the upper hand in this transaction and they could choose whether to repossess or not.
Con argument in support of Walker-Thomas Furniture Company.
This argument tries to prove that the contract signed between Williams and Walker-Thomas was not unconscionable.
1. Walker-Thomas Furniture Company is a leasing operation of furniture and other household equipment in the District of Columbia. (511.1.1)
2. Walker-Thomas Furniture Store rent to own Furniture items to Williams as a regular customer over the past 5 years. (511.1.3)
3. The furniture company clearly stated in contract that the title would be transferred to the buyer when the cost of the items was paid for. (511.1.4)
4. The contract stated that in case of default on any of the payments the company could repossess the furniture. (511.1.5)
5. Williams did default on her payments, thus it was lawful for the Furniture Company to repossess the items. (511.3.4)
6. The Walker-Thomas Furniture Company sold Williams a stereo system at competitive rates. (512.1.70)
7. Because of the nature of the furniture business and the ability of its products to depreciate quickly, the furniture company had to repossess previously bought items on default in order to remain viable. (511.3.4)
8. The Furniture Company was not responsible for the fact that the appellant had to support seven children. (512.1.7)
9. The Furniture Company took great risks in leasing items; therefore the company had to protect its investment. (513.6.5)
10. Therefore from the above stated premises the contract was not unconscionable and the court should make a ruling in favor of the Furniture Company. (513.5.)
The agreement entered into by the Walker-Thomas Company and Williams was based on mutual understanding of the rules laid out in the contract. At no time did the parties express any dissatisfaction with the wording. Williams had been doing business with the company for over five years, therefore she knew what to expect. The company had to charge competitive rates on furniture as it could depreciate quickly in value. In addition the company is in the business of making profits and as such would not turn away customers. The contract was entered into by two willing partners who both benefitted from the transaction. This contract was not unconscionable as the furniture company did not use any form of misrepresentation or duress in order to gain the appellant`s business.
Companies like the furniture store are in business to make profits but should they be able to exploit people to make profits? The contract was entered into by two willing parties but the parties were not equal, in the sense that the Furniture Company had the advantage and the bargaining power. Since the contract states that in case of default the company could repossess, under what circumstances would the furniture company not repossess the contracted items when a customer defaulted?
You say that according to Dworkin if there is no fraud then the person cannot later relieve himself from the burden. What is fraud and how is it determined? There are other things that determine unconsionibility besides fraud. Unconsionability can be determined by absence of meaningful choice (512.5.1). Another way is through lack of consent to terms along with unfair contractual contractual terms (513.1.1). How is this not fraud? Non-fraudulent misrepresentation is the negligent or innocent misrepresentation by one party to a contract or to agree to terms to which the party would not have agreed had the person known the truth. (504.5.1) non-fraudulent misrepresentation has the same elements of fraudulent misrepresentation (504.5.2). According to Lynn Berat, "a party who has been persuaded by misrepresentation to enter into a contract or to accept terms to which he or she otherwise would not have agreed is entitled to relief if the representation was intentional, negligent, or innocent," (503.5.3).
What about exploitive contracts? The dissenting opinion Circuit Judge, Danaher stated that Congress needed to establish legislation to protect against such exploitive contracts as the one presently before the court (513.4.2). This indicates that there was evidence of exploitation on the part of the Furniture Company in some way. We cannot just dismiss the fact that the Walker-Thomas contract had records of William"s financial situation, the fact that she had seven children and her social worker"s name on the back of the contract. Why collect this information if they do not turn down customers? Although there is risk the furniture company could have chosen to use this information to work out a better contract for Williams instead of repossessing her items. The total initial value of all the items the Williams purchased came up to $1,800.00 but the total she would be paying the store to gain the title of the items was $14,000.00. If this is not exploitive or unfair then what is?
You say that the stereo was not a necessity for her but people differ in judgments about what is necessity and luxury. What might be considered luxurious to one person might be a necessity for others (513.6.1). Do you think that there should be limitations on the spending of relief funds? A stereo set might not seem like a necessity for some but for others it could be their only way of hearing the news in the morning, or hearing weather alerts and government warnings.
I know that fraud is not the only factor that contributes to unconscionability; other factors may include duress, misrepresentation, undue influence, non-fraudulent misrepresentation, and differences in bargaining power.
Fraud may be defined as a deliberate dishonesty act in order to gain an unfair advantage. There is no evidence that the furniture company used any false or deceptive practices in getting Williams to sign any contract. Alan Wertheimer states in his essay that unconscionability was meant to prevent oppression and unfair surprise. It had nothing to do with the fact that the Furniture Company had greater negotiating power.(489.1.4) Williams knew what she was getting into when she signed that contract. She had been signing several contracts with the Company over the years. The company had to protect its investments and plan for the future. The contract between the appellant and the furniture company should be looked upon as binding as it was voluntary, however unjust it may appear. (488.2.5) I do not see the contractual arrangement as exploitative on the part of the Furniture Company, because both benefited .You mentioned that the Justice Danaher in in his dissent stating that congress should establish legislation to protect against exploitative contracts .However this is his opinion and I am sure other Justices see it another way. If you are leasing someone Furniture items, I am sure you would want as collect as much information as possible. The previous Furniture was held as a form of collateral in ensuring that she did not default on the most recent transactions. The buyer had meaningful choice in that she had the option of not buying the stereo system. If Williams wanted to hear the news, weather alerts and government warnings then she could have taken out a transistor radio. This would be cheaper and less prohibitive. Yes I believe there can be restrictions on spending of relief funds. It would be better spent on basic necessities such as stoves, refrigerators and cooking utensils.
Unconscionability due to bargaining power, little real choice, commercially unreasonable contract with little or no knowledge of its terms then it is as if his consent was never even given. When this happens then if unfairness is determined then the contract is unconscionable. The contract contained complex language so it is not clear that Williams understood everything even if she had previously signed contracts with the company. The fact that she did it voluntarily is not the issue here because she could have voluntarily signed the contract even though she did not understand the full meaning of the terms. In determining unfairness or unreasonableness in a contract the terms of the contract are to be looked at together with the circumstances surrounding the case (513.2.1). The furniture company was aware of William"s financial situation and the terms of the contract favored the Furniture Company. No rational person would agree to a contract where a company would be able to repossess all the items that they had previously purchased from a company if they defaulted on one of the payments. Therefore the Walker-Thomas Furniture Company"s contract is unconscionable because Williams did not comprehend the full meaning of the terms contained in the contract and the circumstances surrounding the transaction of the case was unfair.
In a standard form contract, a great majority of transactions are based on the unwritten rule that that you can either do business with the company if you agree with the arrangement or seek other alternatives. (493.1.6-7) Williams in a situation like this could have sought other alternatives. Williams did understand the terms of the contract and the situation; she just wanted a way out of the responsibilities. The contractual arrangement between both parties was a fair one and therefore not unconscionable.
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