CORNELL ECON 4040 - Walker/Fiege (3 pages)

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Lecture 15

Lecture number:
Lecture Note
Cornell University
Econ 4040 - Economics and the Law

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Econ 4040 1st Edition Lecture 15 Outline of Last Lecture I Javins Outline of Current Lecture II Walker III Fiege Current Lecture Brief Fact Summary Appellee Walker Thomas Furniture Co a retailer of furniture leased items to consumers pursuant to a contract that stated Appellee would retain title of the furniture until the total of the lease payments made equaled the stated value of the piece of furniture at which time the consumer would own the furniture Each contract inconspicuously contained a provision stating that if more than one item is purchased the monthly payments shall be applied pro rata among all the items purchased thereby allowing Appellee to retain title on each piece of furniture longer Synopsis of Rule of Law An unreasonable and unconscionable contract not void for fraud will be enforced but the damages will be only what the suing party is equitably entitled to Facts Appellee operated a retail furniture store Appellee permitted consumers to purchase furniture by paying monthly installments Such purchases were governed by a form contract that provided the value of the item and purported to lease the item for a monthly payment The contract stated that the appellee would retain title to the furniture until the total of all monthly payments equaled the value of the item In the event of default the appellee could repossess the item The contract also contained an obscure provision that allowed the appellee to apply each monthly payment pro rata to all outstanding leases The effect of such a provision is to keep a balance due on every item until there was no balance due on any of the items This gave Appellees the right to repossess all items in the case of a default Appellants Thorne and Williams both purchased items that were repossessed under a purchase contract These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Issue Did the lower courts properly reject

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