Williams v. Walker-Thomas Furniture Co.

United States Court of Appeals for the District of Columbia Circuit · 1965 · Contracts

350 F.2d 445 (D.C. Cir. 1965)

Updated July 31, 2026

contractsunconscionabilitymeaningful choiceunequal bargaining powercommercially unreasonable termsinstallment salescross-collateralizationfine print

Facts

Walker-Thomas sold household goods to the appellants through printed installment contracts that purported to lease each item until payments equaled the item's stated value. The contracts provided that each payment would be credited pro rata to all outstanding accounts, with the effect that no item was fully paid off until all items were paid off and default on any installment allowed repossession of all items previously purchased. Thorne defaulted shortly after a 1962 purchase, and Walker-Thomas sought to replevy all items he had purchased since 1958. Williams likewise defaulted shortly after buying a stereo in 1962, and Walker-Thomas sought to replevy all items she had purchased since 1957.

Issue

May a court refuse to enforce a contract on the ground that it is unconscionable, and if so, should these contracts be denied enforcement on that basis? More specifically, can the common law of the District of Columbia recognize unconscionability as a defense to enforcement of these installment contracts?

Rule

Where the element of unconscionability is present at the time a contract is made, the contract should not be enforced. Unconscionability generally includes an absence of meaningful choice on the part of one party together with contract terms unreasonably favorable to the other, judged in light of all the circumstances existing when the contract was made and the general commercial background and needs of the trade or case.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Baltimore, Nora Jenkins bought a used refrigerator from Harbor View Home Goods under a printed installment agreement. After she defaulted, the store sued for the contract balance, and Nora argued the agreement was unconscionable; the trial judge ruled that, absent a specific consumer statute, a court had no power to deny enforcement on that ground.

What is the best analysis of Nora’s argument?

Explanation. The majority recognized a common-law power to refuse enforcement of unconscionable contracts. It treated later statutory adoption of a similar rule as persuasive, not as a necessary source of authority. Thus a court is not barred from considering unconscionability merely because no specific consumer statute applies. (Derived from Williams v. Walker-Thomas Furniture Co. (1965).)