Case Brief Ashleigh Diehl
MANGT 525 Commercial Law and Project Procurement
Professor William H Volz
Case Name: Jones v Star Credit Corp
Court Delivering Opinion: Supreme Court, Special Term, Nassau County
Citation No. 59 Misc 2d 189 (1969)
Facts: On August 31st, 1965, the Jones’ (welfare recipients) purchased a home freezer unit from a Shop at Home Services, Inc representative for the price of $900. After taxes and time credit charges, credit life insurance, and credit property insurance were added to the price, the total came to $1234.80. At the time of the trial, the Jones’ had paid $619.88 and still owed $819.81. The retail price of the freezer was also determined at trial to be $300.
The defendant argues that the contract on June 15th, 1966 is a financing contract and not a sales contract. The finance agreement states” Refinance of Freezer A/x #6766 and Food A/c #56788”. This agreement requests for refinancing and signed by the ...view middle of the document...
In addition, the credit charges exceeded the retail value of the freezer by more that $100. The seller knew this and still took advantage of the purchaser knowing their financial limitations.
* The law is fighting back in favor of the poor and illiterate to help protect against those that prey on this population
* Protecting the uneducated and often illiterate is important because they can fall victim to gross inequality of bargaining power.
* A court can find a contract “unconscionable at the time it was made” and may refuse to enforce the contract, excise the objectionable clause or limit the application of the clause. Section 2-302 Uniform Commercial Code
* Credit charges exceeded the retail value of the freezer by $100.
* Many previous court decisions supported decision. American Home Improvement v Maciver, Matter of State of NY v ITM, Frostifresh Corp v Renoso
* Known limited resources of the purchaser at the time of sale by Shop at Home Services rep, entitles weight in the balance.
Comments: I agree with the courts decision that the Jones’ had already paid enough ($600) to compensate and allow for a profit on the $300 freezer. Having seen my grandmother fall victim to a similar scam, I knew that these laws are in place to protect the elderly, poor, and illiterate. All too often, these populations fall victim because they’re presented with payment plans that at first seem affordable but in the end, they end up paying way more than the product is worth. The line of credit that these companies offer are in some ways necessary to allow the purchase of products for those that can’t out-right pay but they most definitely need to be kept in check. I used to see commercials for Western Sky loans that offer money quick but their interest rate was 139-200%. You would end up paying $7,000 for a $1,500 loan. Blew my mind but I know that someone out there would see the commercial and think it’s a good idea because they needed the money and would have it in days.