Facts
- The Huffs stored household goods with Bekins under a standard-form storage contract (June 4, 1979) and later contracted with Bekins to move the goods from Yuma to Gilbert, Arizona (June 26, 1980).
- The moving waybills included printed terms requiring (1) a written claim within 90 days after delivery and (2) presentation of a “paid bill or receipt for charges” as a prerequisite to processing a claim.
- Bekins delivered part of the goods on July 3, 1980; the Huffs paid $2,078.64 but later stopped payment after discovering missing and damaged items.
- The remaining goods were delivered on July 12, 1980; a $163 check tendered toward remaining charges was also subject to a stopped payment.
- On July 8, 1980, the Huffs reported loss and damage and were told claim forms would be provided but that Bekins would not act on the claim until charges were paid.
- Bekins sent claim forms around July 25 and August 7, 1980, but the Huffs did not submit a completed written claim within 90 days of delivery.
- On November 7, 1980, the Huffs sued for breach of contract, alleging loss and damage exceeding $10,000; written responses and materials were provided during 1981 discovery after the 90-day period.
Issues
- Whether standard-form waybill provisions requiring a written claim within 90 days and payment of charges before claim processing were enforceable conditions precedent in an adhesion contract.
- Whether enforceability under the reasonable-expectations and oppression/unconscionability limits on adhesion contracts could be decided as a matter of law on summary judgment.
Decision
- The court of appeals reversed summary judgment for Bekins and remanded.
- The court held that material factual questions existed as to whether the 90-day written-claim requirement and the pay-first provision were within the Huffs’ reasonable expectations and whether they were unduly oppressive.
- Because enforceability turned on fact-dependent questions (including what the Huffs were told and how the terms were presented), summary judgment was improper.
- The court awarded the Huffs reasonable attorney’s fees on appeal.
Legal Principles
- An adhesion contract is a standardized form imposed by a party with superior bargaining power on a take-it-or-leave-it basis; it is not unenforceable solely because it is adhesive.
- In adhesion contracts, a term may be denied enforcement if it is outside the adhering party’s reasonable expectations, even absent a separate finding of unconscionability.
- A term may also be denied enforcement if it is unduly oppressive or unconscionable in application.
- When reasonable-expectations or oppression/unconscionability determinations depend on disputed or uncertain facts, they generally cannot be resolved on summary judgment; inferences are drawn for the nonmoving party.
Conclusion
The court held that a mover’s standard-form “pay first” and 90-day written-claim provisions could not be enforced as dispositive conditions precedent on summary judgment where factual questions remained about consumer expectations and potential oppression, and it remanded for further proceedings.