Williams v. Walker-Thomas Furniture Co.

Case brief summary

Facts

A store's contract secretly linked all a customer's purchases, so paying off one item still left a balance until everything was paid, letting the store repossess all items if any payment was missed.

Procedural history

Lower courts ruled for the furniture store and allowed repossession. The appeals court sympathized with the customers but said it lacked power to strike down the contract, suggesting Congress act instead.

Issue

Does a court have the legal authority to refuse to enforce a contract because its terms are unconscionable, and if so, were these specific contracts unconscionable?

Holding

Yes, courts do have the power to refuse to enforce unconscionable contracts, and the case was sent back to the trial court to decide whether these particular contracts actually were unconscionable.

Reasoning

The court relied on old case law and a new statute allowing unconscionable contracts to be struck down, finding unfairness when one side lacks real choice and ends up with very one-sided terms.

Opinions

Majority (Wright): Courts may refuse to enforce unconscionable contracts, and this case is sent back for findings on whether these contracts were unconscionable.

Dissent (Danaher): No sharp practice was proven, the customer understood the deal, and courts should be cautious before limiting freedom to contract.