Martin v. Sheffer

102 N.C. App. 802, 403 S.E.2d 555 (1991)

 

RULE:

To find unconscionability there must be an absence of meaningful choice on part of one of the parties together with contract terms which are unreasonably favorable to the other.

FACTS:

In December of 1987, Daniel Martin and John Duke, the plaintiffs, contracted with the defendant, J&S Distributors, Inc. to purchase a KIS Magnum Speed printer for $ 17,000.00. The parties agreed that the plaintiffs would send one-half of the money as a deposit and would pay the balance upon delivery. On December 28, 1987 the KIS machine arrived in Georgia but the plaintiffs refused to accept it, stating that the delivery was five days late and they had purchased a substitute machine elsewhere. The plaintiffs requested for a return of their deposit and when the defendants refused, the plaintiffs filed for a case of action against the defendants for their alleged breach of contract, fraud, breach of good faith and unfair and deceptive trade practices. The defendant has counterclaimed for full performance pursuant to a clause in the sales contract which the plaintiff argued to be unconscionable and oppressive and should therefore be struck down. The defendant’s motion for summary judgment regarding the deposit was granted, and the trial court ordered specific performance, costs, and attorney fees.

ISSUE:

Did the trial court err in granting the purchaser's motion for summary judgment and in ordering them to pay for the entire balance of the contract?

ANSWER:

No

CONCLUSION:

The Court held that the trial court did not err in its decision. According to the Court, a contractual provision expanding seller's damages upon breach of the buyer will be upheld where the contractual provision is reasonable and in good faith. The Court noted that the plaintiffs did not argue in their brief that they were fraudulently induced into signing the contract, that the clause authorizing specific enforcement is ambiguous or a mistake, or that the seller breached the contract by failing to deliver at the time promised, thereby, concluding that the plaintiffs had freely signed the contract agreeing to a specific performance clause upon breach. Furthermore, the Court held that the plaintiff did not lack meaningful choice in negotiating the terms of the contract, thus, negating the plaintiff’s assertion that the clause is unconscionable and oppressive. The Court maintained that in order to find unconscionability, there must be an absence of meaningful choice on part of one of the parties together with contract terms which are unreasonably favorable to the other. 

Click here to view the full text case and earn your Daily Research Points.