Waters v. Min Ltd. 412 Mass. 64, 587 N.E.2d 231 (Mass. 1992) Waters owned an annuity that was worth $189k in present value and $694k over its guaranteed term. She was on drugs and out of money. She was persuaded by her boyfriend to sell her annuity to Min for $50k. Waters didn't have a lawyer, but Min did. o The contract was also executed under unusual circumstances. For example, it was signed on the hood of a car. Also Min forgave part of a debt that the boyfriend owed to them for helping in this transaction. o The boyfriend suggested the deal after he had maxed out all her credit cards. The guy's a peach, ain't he? Waters sued to rescind the contract on the basis on unconscionablity. o The defendants counterclaimed for specific performance of the contract. The Trial Court found for Waters, gave her back the annuity plus $18k interest. Min appealed. o In the British case of Chesterfield v. Janssen, the term unconscionable was defined as a contract, "such that no man in his senses and not under delusion would make on one hand and as no honest or fair man would accept on the other." o The case of Campbell Soup Co. v. Wentz found a contract to be unconscionable when, "the sum total of its provisions drives too hard a bargain for a court of conscience to assist." The Appellate Court affirmed. o The Court found that Min was taking advantage of Waters' circumstances and should not be rewarded for their bad behavior. Min assumed no risk and Waters received no advantage. o The Court proposed a six part test to determine unconscionablity: The oppressiveness of the contract upon the Project Wonderful - Your ad here, right now, for as low as $0 disadvantaged party Unfair surprise to the disadvantaged party Allocation of risk to the disadvantaged party due to superior bargaining power on the part of the stronger party Gross disparity in consideration Evidence that the stronger party knowingly took advantage of the weaker party The presence of high pressure sales tactics or misrepresentation UCC § 2-302 talks about unconscionablity with regards to the sale of goods. o Although this case wasn't a sale of goods and therefore not bound by the UCC, in this case, the Court used the UCC as part of their decision making process.
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