Williams v. Walker-Thomas Furniture Co.
Debate Rounds (4)
1)Given her low monthly income, Williams would not have been able to afford to buy any of these household items at another store that would have required that she pay in full at the time of purchase. (492.3.3)
2)In her contracts with Walker-Thomas, Williams did not have any bargaining potential and had, presumably, little bargaining ability. (493.7.2-3)
3)Walker-Thomas offered Williams contracts with elevated interest rates due to the assumed risk of selling to someone with a low monthly income; thereby increasing the likelihood that Williams would default and Walker-Thomas would then be able to repossess the items. (492.3.3)
4)At the time of the sale of the stereo, Walker-Thomas again took advantage of Williams"s financial situation despite her history of timely payments on past purchases. (512.2.2)
5)The total of her payments from 1957-1962 was $14,000.00, which far surpassed the value of the goods purchased, during that time. (513.9.1-3)
6)The terms of the contract regarding repossession of items long since paid for was unconscionable and the court should have ruled in favor of Williams.
1) The UCC"s doctrine of unconscionability suggests the doctrine is "designed to prevent oppression and unfair surprise.. and not the disturbance of risks because of superior bargaining power" (488.7.1).
2) The fact that Williams needed a stereo does not give Walker-Thomas any special bargaining power over Williams, since there is a competitive market among the sellers of this good (those of which include rental plans) (493.6.2).
3) Williams was equally aware of her financial situation, and gave no reason for Walker-Thomas to believe that she would unable to make timely payments based on her previous agreements with the company.
4) Walker-Thomas did not use coercion or duress to force Williams into signing the contract.
5) Although the interest rate appears to be high, Walker-Thomas faces approximate equal risk whereas the item(s) sold will depreciate over time and repossession of the item would entail a loss (492.3.2)
6) Therefore, the contract between Williams and Walker-Thomas was not unconscionable.
You claim that the items repossessed would have depreciated over time and the high interest rate goes to cover Walker-Thomas's potential loss upon repossessing items in defaulted sales. If this is the case, would it not have been in their best interest to instead work with Williams to allow her to keep the items worth the amount already paid by her and repossess only what was owed? They would have already made a profit off of her interest payments and would have recouped additional losses by repossessing certain items for additional resale.
You state that the interest rate appears to be high and is formulated that way because Walker-Thomas faces approximate equal risk and that repossession of the item would entail a loss. This does not appear to be an approximate equal risk if Williams is given the burden of making payments and has no product to show for it after five years. If her balance was left at $164 it is more than reasonable to expect a competitive business like Walker-Thomas to come to an agreement about the defaulted payments for the stereo and the outstanding $164. It is also reasonable then to expect that Walker-Thomas would allow her to keep items nearly paid off since 1957 since their value would have decreased for resale, she is a seemingly loyal repeat customer, and had no previous history of payment problems. Williams may have been familiar with the terms of the contract but if she kept doing business with them, she probably thought herself unlikely to fall victim to the unfavorable terms in the contract. Between 1957 and 1962, Williams kept up with her payments even given her low monthly income and the expenses associated with raising seven children.
It is the courts responsibility to prevent business from preying on customers through unconscionable contracts and other unfair business practices. Therefore they must rule in Williams favor.
Furthermore, it is illogical to classify this contract as unconscionable simply because Williams assumed she would not "fall victim to the unfavorable terms in the contract." Because she WAS making the payments on previously purchased items, Walker-Thomas had no reason to believe that they would be victim to the terms of that provision as well.
The contract is not unconscionable merely because Williams assumed she would be able to keep up with her payments. It is unconscionable because even though she had kept up with her payments, after 5 years she was faced with the possibility of having nothing to show for those payments. The provisions of the standard form contract would have put Walker-Thomas at a distinct advantage by not only having earned 5 years worth of installment payments, but also the ability to resell the repossessed items for additional profit. Walker-Thomas may not have had any reason to believe that Williams would fall victim to the terms of the provision, but they had every reason to hope that she would. And it is from exactly this kind of nefarious business practice that consumers, including Williams, must be protected.
I agree with you that it is the court"s responsibility to protect consumers from unfair and potentially harmful actions of retailers and manufacturers. However, Walker-Thomas did not act unfairly towards Williams in regards to the contract. During the consultation in 1957, and again in 1962, Williams was consulted with the entire contract, including the provision which stated Walker-Thomas could repossess the items in which she defaulted payment. If this was truly an unfair and harmful clause, no one, including Williams, would agree to such a contract and Walker-Thomas would have no customers. Virtually, the company would have gone out of business if this was the case. However, Williams (as well as other customers) entered freely into this agreement in order to purchase her stereo.
There is insufficient proof as to what the hopes of Walker-Thomas were. It is true that the company would have authorization to possess the items, but that action is solely based on the action (or, inaction) of Williams, and not Walker-Thomas. "Hope" is not a substantial foundation upon which you could argue that the contract is unconscionable.
It is also an assumption on your part to declare that Walker-Thomas would have no customers due to an unfair and harmful clause in their sales contract. If Williams, and other customers in similar financial situations, sought to buy similar items at another store, she would have been turned away for failure to pay the entire cost at once. Her monthly income and expenses would not have allowed her to purchase the items she was able to get at Walker-Thomas under a different kind of purchase agreement. If Walker-Thomas was the only store to offer these kinds of items on a rent-to-own basis, Williams would not have had a choice about where to shop and her bargaining potential against Walker-Thomas would remain nonexistent. It is this kind of situation that puts Walker-Thomas at a distinct advantage over their customers.
The court has the ability to pick and choose which clauses of a contract to uphold. Rather than ruling only in her favor and absolving Williams of the past due amount of $164 and allowing her to keep all items purchased, the court should allow a re-negotiation of terms to allow her to keep items largely paid off since 1957 in exchange for the return of items of equal or lesser value. This way she has not wasted 5 years of payments out of her limited income on items she can no longer keep. Such a judgment against Walker-Thomas would dissuade similar businesses from utilizing these unfair practices and would set a precedent meant to protect consumers from this kind of contract. And ultimately the ongoing development of the concept of unconscionability under the law is in everyone"s best interest.
You state that if Williams was to attempt to buy a stereo at another store, she would have been turned away because of her financial situation. However, this is also just an assumption. On the contrary, her monthly income and expenses actually DO show that Williams is able to afford the monthly payment plan. However, Williams must also tend to seven children on her government stipend. This is more likely negligence on the part of Williams, and not inconsideration by Walker-Thomas. Therefore, the company still has the right to repossess all items purchased since 1957, making the contract not unconscionable.
1 votes has been placed for this debate.
Vote Placed by DerKing 2 years ago
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Reasons for voting decision: Both gave sources, had pretty good grammar, and were logical. However, because Pro admits that the contract was pre-calculated, and did not disprove Cons argument that she knew she was entering into the unfair contract.
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