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George Mason School of Law

George Mason School of Law. Contracts I Introduction F.H. Buckley fbuckley@gmu.edu. Some housekeeping. LAW 102 (003), Thursdays 6:00 – 7:40 pm First part of a distinct two part series of courses on contract law. 2. Some housekeeping. Contracts I Theoretical Introduction Formation

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George Mason School of Law

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  1. George Mason School of Law Contracts I Introduction F.H. Buckley fbuckley@gmu.edu

  2. Some housekeeping • LAW 102 (003), Thursdays 6:00 – 7:40 pm • First part of a distinct two part series of courses on contract law 2

  3. Some housekeeping • Contracts I • Theoretical Introduction • Formation • Relational Contracts 3

  4. Some housekeeping • Contracts II • Why we shouldn’t enforce: Fraud etc. • What’s in the contract: Terms, Conditions • Excuses: Mistake/Frustration • Remedies 4

  5. Some housekeeping • The exam: Open Code • Optional upgrade based on classroom performance • Why I don’t give practice exams 5

  6. Some housekeeping • The structure of the casebook 6

  7. On learning with new technology • There’s thing thing called Wikipedia • GMU Library resources • J for JSTOR • InPrimo • What this does (or should do) to teaching 7

  8. On absorbing the material • By verbalizing? • Numbers, stories and pictures 8

  9. The name of a case (case citation) Williams v. Walker-Thomas Furniture Co.

  10. Williams at 53 Williams v. Walker-Thomas Furniture Co. District of Columbia Court of Appeals 198 A.2d 914 (1964)

  11. The procedural aspect • Who is suing? • And what remedy is sought? • Cf. Maitland on the forms of action

  12. How did it end up here? Williams v. Walker-Thomas Furniture Co. District of Columbia Circuit Court of Appeals 350 F.2d 445 (1965)

  13. Who was Ora Lee Williams? 13

  14. Who was Ora Lee Williams? • If you had to describe her in one word, what would that word be?

  15. Walker-Thomas Furniture Store1074 Seventh St. NW (at L) 15

  16. Williams v. Walker-Thomas 16

  17. What gave Walker-Thomas a right of replevin?

  18. What gave Walker-Thomas a right of replevin? • Title to remain in seller until all goods paid for

  19. What gave Walker-Thomas a right of replevin? • Conditional Sale: (Title) (Possession) Vendor Purchaser

  20. What gave Walker-Thomas a right of replevin? • UCC Article 9: (Security Interest) (Possession) Secured Party Debtor

  21. What gave Walker-Thomas a right of replevin? • Title to remain in seller until all goods paid for • Does it matter that Walker-Thomas filed approximately 100 writs of replevin a year?

  22. Do we have a problem with this? Is secured lending a problem?

  23. Do we have a problem with this? • Secured lending? • UCC 9-201. General Validity of Security Agreement. Except as otherwise provided by this Act, a security agreement* is effective according to its terms between the parties, against purchasers of the collateral and against creditors. *A security agreement creates a security interest in collateral

  24. And if the debtor defaults?

  25. And if the debtor defaults?

  26. And if the debtor defaults? • SP has the right to retake possession • SP can resell and: • Account to debtor for surplus if the resale price exceeds the indebtedness • Sue for the deficiency if the resale price is less than the indebtedness

  27. And if the debtor defaults? • In Williams v. Walker-Thomas, are we talking about a surplus or a deficiency?

  28. What gave Walker-Thomas a right of replevin? • What was the “rather obscure clause” that permitted Walker-Thomas to repossess Mrs. Williams’ bed.

  29. What gave Walker-Thomas a right of replevin? • How would you have drafted the clause?

  30. What gave Walker-Thomas a right of replevin? • Suppose that, on the first loan, Walker-Thomas had taken a security interest in all the assets she acquired subsequently (from anyone)?

  31. What gave Walker-Thomas a right of replevin? • Suppose Walker-Thomas had taken a security interest in all the assets she acquired subsequently (from anyone)? • UCC 9-204: After-acquired property (A)  … a security agreement may create or provide for a security interest in after-acquired collateral. 

  32. After-acquired CollateralCurrent assets financing Inventory, Accounts receivable Security Interest

  33. What gave Walker-Thomas a right of replevin? • But cf. 9-204(b)(1) A security interest does not attach under a term constituting an after-acquired property clause to consumer goods • Why is that?

  34. Quinn on vitiating factors • What is the difference between “a lack of meeting of the minds”and“contracts against public policy,” per Quinn J.

  35. Substantive vs. Procedural Unconscionability • No “meeting of the minds” a matter of procedural unconscionability • But there’s still a question of substantive unconscionability

  36. Substantive vs. Procedural Unconscionability • Substantive: The clause is never enforceable, even if agreed to consciously by a person of full capacity • Procedural: The clause is enforceable if agreed to consciously by a person of full capacity, but not otherwise

  37. Substantive Unconscionability • Are there some bargains that are so vicious that they should be outlawed, even if the parties consent to them? • How does one tell? • Give me an example….

  38. Substantive Unconscionability • Are there some bargains that are so vicious that they should be outlawed, even if the parties consent to them? • Is Walker-Thomas an example of this?

  39. Recall UCC § 9-204(b)(1) • A security interest does not attach under a term constituting an after-acquired property clause to consumer goods

  40. Substantive Unconscionability • Why did Walker-Thomas insert the clause in the contract? • Can you think why Walker-Thomas might want a right to repossess five year old household junk?

  41. Substantive Unconscionability • Aquinas on the just price • Leff on “Thomist Unconscionability”

  42. Substantive Unconscionability • When you say you are troubled by a contract, as a matter of public policy, just what have you said?

  43. Procedural Unconscionability and Williams • Don’t enforce if there is no “meeting of the minds”

  44. ProceduralUnconscionability • A meeting of the minds? • Why might Mrs. Williams rationally have agreed to the clause?

  45. Procedural Unconscionability • How would you expect Walker-Thomas to react if the clause is banned?

  46. So what kind of unconscionability are we talking about in Walker-Thomas?

  47. In the DC Circuit: Skelly Wright Where did he get the unconscionability doctrine from?

  48. What do you infer from the subsequent adoption of UCC § 2-302(1)? • If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

  49. Was there an “absence of meaningful choice”?

  50. Why didn’t she shop at Woodward & Lothrop?10 blocks from Walker-Thomas

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