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Williams v. Walker-Thomas Furniture Co.

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Voting Style: Open Point System: 7 Point
Started: 5/11/2014 Category: Philosophy
Updated: 3 years ago Status: Post Voting Period
Viewed: 625 times Debate No: 54491
Debate Rounds (4)
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Votes (1)




Walker-Thomas was a furniture company based in District of Columbia. Sales were made on a rent-to-own basis. Over a period of four years, Williams entered knowingly into multiple contracts with Walker-Thomas. Walker-Thomas utilized a standard contract in all of its dealings, which were not open for negotiation. The standard contract stated that items were essentially rented until fully paid for, at which point the title would be transferred to the buyer"s name. It was also stated that if any payments were missed, any items not fully paid up were eligible to be immediately repossessed by Walker-Thomas. Williams"s monthly payments, including interest, were calculated based on her monthly income of $218 from the government and the fact that she had to provide for her seven children. At the time of her purchase of a stereo set in 1962, Williams owed only $164 to Walker-Thomas for prior purchases. It is not clear if any titles for those previously bought items had been transferred to her name. She defaulted on her payments shortly after buying the stereo set and Walker-Thomas sought to repossess all items in contract going back to 1957. It is noted in the courts decision that while her purchases totaled $1,800.00, she made payments totaling $14,000.00. This means she was given a highly unfavorable interest rate due to her unstable financial situation. The non-negotiable terms of the contract and the elevated interest rate show that Walker-Thomas took advantage of Williams for significant financial gain. The business practice of repossessing items long since paid for from a customer who has already been taken advantage of in contract is unconscionable. The Court should have ruled in favor of Williams and allowed the titles to be transferred to her name for all items purchased before the stereo. Walker-Thomas should have been ordered to repossess the stereo and collect the outstanding $164 from Williams, thus concluding all business dealings between the parties.

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.


The contract between Williams and Walker-Thomas is not unconscionable. Williams voluntarily purchased a stereo from Walker-Thomas, a company in which she has rented items from before. Both parties were aware of Williams" financial situation, which remain mostly unchanged since 1957, or the period when she was making timely payments on the initial items rented from Walker-Thomas. The fact that Williams needed a stereo does not give Walker-Thomas special bargaining power over Williams, since there is a competitive market among the sellers of this good. In fact, the price presented to Williams was most likely the equilibrium price for this good. Williams was offered an agreement, and she voluntarily chose to enter into it. If she was unhappy with the terms, she had the freedom to walk away and find another company to rent a stereo from. Furthermore, Williams was not physically or psychologically forced in any way into signing the contract. She had the freedom of choice to not take the deal, and the price offered by Walker-Thomas was not a wrongful act to begin with. Lastly, both parties face an approximately equal amount of risk by entering into this agreement. The items in which Walker-Thomas could seek to repossess will have depreciated in price over time, especially items for which technological advances are made extremely often. Also, Walker-Thomas faces a substantial amount of legal fees each time they seek to repossess any item. Based on this evidence, the contract between Walker-Thomas and Williams is unconscionable.

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.
Debate Round No. 1


You state that the UCCs 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. While this is part of the doctrine of unconscionability, it is not exclusive to these terms. Unconscionability can be found beyond these terms and is easily found in Williams vs. Walker-Thomas. The terms of the contracts between Williams and Walker-Thomas, wherein Walker-Thomas may repossess all items purchased if Williams defaulted on a single payment, are unreasonably favorable to Walker-Thomas. The contracts provide a safety net for Walker-Thomas in the event that a buyer defaults on payments. But no such consideration is made for Williams, even given her past reliability as a buyer. At the time of the lawsuit, she owed only $164 to Walker-Thomas. This means the bulk of the items purchased between 1957 and 1962 would have been almost entirely paid off. Instead of working with her to a mutually beneficial solution, like a reconsideration of her payment plans, Walker-Thomas chose to repossess those past items nearly paid off.

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.


It may seem like the terms of the contract are unreasonably favorable to Walker-Thomas, but this is not the case. The standard form contract in which both parties entered into clearly granted authorization for Walker-Thomas to repossess the items in the event of a default of payment. It is true that there exists the absence of a provision which could have stated the the possibility for both parties to reconsider her payment plans. However, no such provision exists, and Williams voluntarily entered into this agreement with full knowledge of her circumstances. You accuse Walker-Thomas of failing to take the responsibility of working with her more to reach a more beneficial solution. However, Williams must take responsibility of her actions, which was entering into a contract that required monthly payments for a stereo while attempting to raise seven children on welfare.

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.
Debate Round No. 2


While the agreement may have been signed in the form of a standard form contract, that does not make it correct. Walker-Thomas was in a superior financial position to hire legal assistance to perfect their unfair business model and take advantage of people like Williams. Williams did not have the advantage of excess wealth to have someone review the contracts for her. Walker-Thomas did fail to work with Williams towards an amicable solution even though they clearly had the means to do so. That is why it is the duty of the courts to protect consumers from unfair practices, such as this kind of standard form contract. It is not the duty of the court to pass judgment on the lifestyle of consumers but rather to protect them from the potentially harmful actions of retailers/manufacturers. The definition of unconscionable is left vague for the specific purpose of allowing the courts to decide on a case-by-case basis. In this case, it is clear that Walker-Thomas formulated their standard contract to allow for maximum gain and put the buyer at a disadvantage. Even someone in a better financial position than Williams could have fallen prey to the fine print provisions.

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.


You claim that Walker-Thomas was in a superior financial position to hire legal assistance to perfect their unfair business model. However, this is just an assumption. In fact, Walker-Thomas is a decent-sized company only operating in one U.S. city. They are not a multi-million dollar corporation, and are not free to spend a frivolous amount on the hiring of brute corporate lawyers.

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.
Debate Round No. 3


You state that it is an assumption to say that Walker-Thomas had attorneys draw up their contracts. However is it not typically attorneys who draft legal documents? You then state that Walker-Thomas is a "decent sized company" without citing any information about the business"s backgrounds. It must be fair then to say that these too are assumptions. However, even if Walker-Thomas is a small business, they are still in a better financial situation to develop a business model, with or without attorneys, to put them at an advantage over their customers. An individual like Williams does not have those same or comparable advantages.

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.


I think you may have misunderstood my first point. I was disagreeing with your phrase "superior financial position," not the fact that lawyers draft the legal documents. I am stating that this company was not as financially solid as you paint it to be.

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.
Debate Round No. 4
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1 votes has been placed for this debate.
Vote Placed by DerKing 3 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.