Mike owns a house in a low-income area of a large city.Mike is on disability,and his total monthly income is $700.A sales representative visits his home to sell him a water purification system.Mike signs a contract that calls for monthly payments of $500 for the next 10 years.The water system is worth no more than $1,000.Mike thought he was signing a permission slip allowing the salesman to conduct a free water test to determine the toxins in the water.How would a court most likely describe this contract?
A)The contract is fully enforceable as written.
B)The contract is unenforceable because it is unconscionable.
C)The contract is enforceable,but only up to the value of the water system.
D)The contract is unenforceable because it is exculpatory.

Question

Mike owns a house in a low-income area of a large city.Mike is on disability,and his total monthly income is $700.A sales representative visits his home to sell him a water purification system.Mike signs a contract that calls for monthly payments of $500 for the next 10 years.The water system is worth no more than $1,000.Mike thought he was signing a permission slip allowing the salesman to conduct a free water test to determine the toxins in the water.How would a court most likely describe this contract?
A)The contract is fully enforceable as written.
B)The contract is unenforceable because it is unconscionable.
C)The contract is enforceable,but only up to the value of the water system.
D)The contract is unenforceable because it is exculpatory.

Quizplus · Accepted Answer

This contract is likely unconscionable, as it takes advantage of Mike's vulnerable situation and lack of understanding about the nature of the contract. The payments being almost all of his monthly income for an extended period of time also exacerbate this issue.

Mike Owns a House in a Low-Income Area of a Large