Toker v. Westerman

274 A.2d 78 · New Jersey Superior Court Appellate Division · 1970

Facts

On November 7, 1966, People's Foods of New Jersey, plaintiff's assignor, sold a refrigerator-freezer to defendants William and Lisa Westerman under a retail installment contract. The cash price for the unit was $899.98, but with sales tax, insurance, and time price differential, the total amount was $1,229.76, payable in 36 monthly installments. Defendants made some payments but resisted paying the balance of $573.89, claiming the unit was greatly overpriced. An appliance dealer testified the unit was an 18 cubic foot, non-frost-free, "stripped unit" with a reasonable retail price of $350-$400, while the most expensive comparable unit was $500. The sale was made by a door-to-door salesman, and defendants sought welfare assistance during the payment period.

Issue

The legal questions presented are whether the contract price for the refrigerator-freezer is unconscionable, and if so, whether the provisions of N.J.S. 12A:2-302 apply to make the contract unenforceable.

Holding

The court found the sale of the refrigerator-freezer for approximately 2.5 times its reasonable retail value to be unconscionable. Therefore, the payment of the balance of the purchase price will not be enforced, and judgment was entered for the defendants.

Rule

Under N.J.S. 12A:2-302, a court may refuse to enforce a contract or clause found to be unconscionable at the time it was made. An unconscionable contract is defined as one that "no man in his senses and not under a delusion would make on the one hand, and as no honest and fair man would accept on the other." The court determined that a flagrantly excessive purchase price alone, such as approximately 2.5 times the reasonable retail value, can render a contract unconscionable. This is particularly true for door-to-door sales where the seller may have lower overhead, and the court found the price in this case to be shocking.

Read the full opinion on CourtListener

Case brief last reviewed . Prepared by CaseReader from the published opinion.