## Facts

- A door-to-door seller sold William and Lisa Westerman a refrigerator-freezer under a retail installment contract dated November 7, 1966.
- The seller’s assignee, Robert Toker (t/a Budget Associates of New Jersey), sued to recover the unpaid contract balance.
- The contract stated a cash price of $899.98; with sales tax, group life insurance, and a time-price differential, the total was $1,229.76 payable in 36 monthly installments of $34.16.
- The Westermans paid $655.85 but refused to pay the remaining $573.89.
- The Westermans asserted the price term was unconscionable under N.J.S. 12A:2-302 (UCC § 2-302).
- Defendants offered expert testimony that the unit was a basic, non-frost-free refrigerator-freezer with no special features and a reasonable retail price at the time of sale of $350–$400; the most expensive comparable unit was about $500.

## Issues

1. Whether UCC § 2-302 (N.J.S. 12A:2-302) applies to a consumer retail installment sale of household goods.
2. Whether the contract price, substantially exceeding the unit’s reasonable retail value, was unconscionable at the time of contracting.
3. If unconscionable, what remedy the court should apply under § 2-302(1).

## Decision

- The court applied N.J.S. 12A:2-302 to the consumer sale and treated unconscionability as a question for the court as a matter of law.
- The court found the contract price grossly excessive in relation to the item’s reasonable retail value and deemed the price term unconscionable at the time the contract was made.
- The court refused to enforce the contract as to the unpaid balance and denied the plaintiff recovery of the remaining $573.89.

## Legal Principles

- Under N.J.S. 12A:2-302 (UCC § 2-302), if a court finds a contract or clause unconscionable at the time it was made, it may refuse to enforce the contract, enforce the remainder without the unconscionable clause, or limit the clause to avoid an unconscionable result.
- The statute contemplates an evidentiary presentation concerning the commercial setting, purpose, and effect of the challenged term.
- A sufficiently extreme disparity between contract price and reasonable market value, assessed in context, can support a finding of substantive unconscionability and justify denying enforcement of the obligation to pay the excessive price.

## Conclusion

The court held that a door-to-door retail installment sale contract for a refrigerator-freezer was unconscionable under UCC § 2-302 because the price was grossly excessive compared to reasonable retail value, and it therefore barred recovery of the remaining unpaid balance.


Toker v. Westerman, 274 A.2d 78 (N.J. Super. Ct. Dist. Ct. 1970)