It came to your attention that your great-grandmother had signed a contract pursuant to which she would be paying $5,000 for an electronic organ that retails in reputable stores for $3,000. Furthermore, the interest being charged is 18%, even though today's rate fell to a 20-year low. This debt is totally out of line with her pension income. It is apparent that she was misled by the door-to-door salesman who came to her place. On these facts, which of the following laws is the most likely to help her?
A) Both unconscionability and misrepresentation
B) Non est factum
C) Undue influence only
D) Misrepresentation only
E) Unconscionability only

Question

Quizplus · Accepted Answer

The situation presents both unconscionability and misrepresentation. Unconscionability refers to a situation where a contract is so unfair and one-sided that it would be unreasonable and unjust to enforce it. In this case, the contract is grossly unfair, with a price that is much higher than the market value, and the interest rate charged is also exorbitant. This puts the great-grandmother in a position of vulnerability and disadvantage.

Misrepresentation refers to a situation where one party deliberately or negligently makes a false statement that induces the other party to enter into the contract. In this case, the door-to-door salesman mislead the great-grandmother into believing that the organ was worth $5,000, when it was only worth $3,000.

Therefore, the most likely law that can help the great-grandmother in this situation is both unconscionability and misrepresentation.

It Came to Your Attention That Your Great-Grandmother Had Signed