## Facts

- Welfare-recipient consumers purchased a home freezer after a door-to-door solicitation by a seller.
- The seller set a cash price of $900; with sales tax and multiple credit-related add-ons, the contract total was $1,234.80.
- The buyers paid $619.88 before the dispute.
- The assignee-finance company asserted additional charges for payment extensions, claiming a remaining balance and a total cost of about $1,439.69.
- Trial evidence showed the freezer’s maximum retail value at the time of sale was approximately $300.
- The buyers challenged enforcement of the contract under U.C.C. § 2-302 as unconscionable.

## Issues

1. Whether, under U.C.C. § 2-302, the contract’s price and related charges were unconscionable at the time of contracting given the extreme disparity between price and retail value and the buyers’ circumstances.
2. If unconscionable, what remedy the court could order under U.C.C. § 2-302(1), including refusing enforcement beyond amounts already paid.

## Decision

- The court held the transaction and resulting retail installment contract unconscionable as a matter of law under U.C.C. § 2-302.
- The court concluded the price term could be scrutinized for unconscionability and was not insulated from review merely because it concerned price.
- The court limited enforcement to avoid an unconscionable result, refusing to permit recovery beyond the $619.88 already paid by the buyers.

## Legal Principles

- Under U.C.C. § 2-302(1), if a court finds a contract or clause unconscionable at the time it was made, it may refuse to enforce the contract, enforce it without the offending clause, or limit the clause’s application to avoid an unconscionable result.
- Under U.C.C. § 2-302(2), when unconscionability is at issue, the parties must have a reasonable opportunity to present evidence about the transaction’s commercial setting, purpose, and effect.
- Unconscionability may be based on both procedural factors (lack of meaningful choice, gross inequality of bargaining power, exploitative sales practices) and substantive factors (terms that are unreasonably favorable to one party), including an extreme disparity between price and market value.
- Installment and credit pricing may reflect legitimate risk, but a price and charge structure far exceeding reasonable compensation for that risk may be unconscionable.

## Conclusion

The court applied U.C.C. § 2-302 to a consumer installment sale where the effective price greatly exceeded the item’s retail value and the buyers lacked meaningful bargaining power, and it granted relief by limiting enforcement of the contract to the amount already paid.


Jones v. Star Credit Corp., 59 Misc. 2d 189, 298 N.Y.S.2d 264 (Sup. Ct. Nassau Cnty. 1969)