George Mason School of Law
Contracts I
Introduction
F.H. Buckley
fbuckley@gmu.edu
1
Some housekeeping
 LAW 102 (003), Thursdays 6:00 –
7:40 pm
 First part of a distinct two part series
of courses on contract law
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Some housekeeping
 Contracts I
 Theoretical Introduction
 Formation
 Relational Contracts
3
Some housekeeping
Contracts II
 Why we shouldn’t enforce: Fraud etc.
 What’s in the contract: Terms,
Conditions
 Excuses: Mistake/Frustration
 Remedies
4
Some housekeeping
 The exam: Open Code
 Optional upgrade based on classroom
performance
 Why I don’t give practice exams
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Some housekeeping
 The structure of the casebook
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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
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On absorbing the material
 By verbalizing?
 Numbers, stories and pictures
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The name of a case (case citation)
Williams v. Walker-Thomas Furniture
Co.
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Williams at 53
Williams v. Walker-Thomas Furniture
Co.
District of Columbia Court of Appeals
198 A.2d 914 (1964)
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The procedural aspect
 Who is suing?
 And what remedy is sought?
 Cf. Maitland on the forms of action
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How did it end up here?
Williams v. Walker-Thomas Furniture
Co.
District of Columbia Circuit Court of Appeals
350 F.2d 445 (1965)
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Who was Ora Lee Williams?
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Who was Ora Lee Williams?
 If you had to describe her in one
word, what would that word be?
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Walker-Thomas Furniture Store
1074 Seventh St. NW (at L)
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Williams v. Walker-Thomas
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What gave Walker-Thomas a
right of replevin?
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What gave Walker-Thomas a
right of replevin?
 Title to remain in seller until all goods
paid for
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What gave Walker-Thomas a
right of replevin?
 Conditional Sale:
(Title)
Vendor
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(Possession)
Purchaser
What gave Walker-Thomas a
right of replevin?
 UCC Article 9:
(Security Interest)
Secured Party
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(Possession)
Debtor
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?
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Do we have a problem with this?
 Is secured lending a problem?
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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
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And if the debtor defaults?
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And if the debtor defaults?
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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
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And if the debtor defaults?
 In Williams v. Walker-Thomas, are we
talking about a surplus or a
deficiency?
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What gave Walker-Thomas a
right of replevin?
 What was the “rather obscure clause”
that permitted Walker-Thomas to
repossess Mrs. Williams’ bed.
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What gave Walker-Thomas a
right of replevin?
 How would you have drafted the
clause?
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What gave Walker-Thomas a
right of replevin?
 Suppose that, on the first loan, WalkerThomas had taken a security interest in
all the assets she acquired subsequently
(from anyone)?
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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.
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After-acquired Collateral
Current assets financing
Security Interest
Inventory, Accounts receivable
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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?
33
Quinn on vitiating factors
 What is the difference between “a
lack of meeting of the minds” and
“contracts against public policy,” per
Quinn J.
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Substantive vs. Procedural
Unconscionability
 No “meeting of the minds” a matter
of procedural unconscionability
 But there’s still a question of
substantive unconscionability
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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
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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….
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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?
38
Recall UCC § 9-204(b)(1)
 A security interest does not attach under
a term constituting an after-acquired
property clause to consumer goods
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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?
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Substantive Unconscionability
 Aquinas on the just price
 Leff on “Thomist Unconscionability”
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Substantive Unconscionability
 When you say you are troubled by a
contract, as a matter of public policy,
just what have you said?
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Procedural Unconscionability
and Williams
 Don’t enforce if there is no “meeting
of the minds”
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Procedural Unconscionability
 A meeting of the minds?
 Why might Mrs. Williams rationally have
agreed to the clause?
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Procedural Unconscionability
 How would you expect WalkerThomas to react if the clause is
banned?
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 So what kind of unconscionability are
we talking about in Walker-Thomas?
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In the DC Circuit: Skelly Wright
Where did he
get the
unconscionability
doctrine from?
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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.
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Was there an “absence of
meaningful choice”?
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Why didn’t she shop at
Woodward & Lothrop?
10 blocks from Walker-Thomas
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Or Garfinckel’s?
11 Blocks from Walker-Thomas
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What happened to Walker-Thomas?
1074 Seventh St. NW (at L)
When did it
go dark,
do you think?
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Seventh Street NW, April 5, 1968
What happened the day before?
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An “absence of meaningful
choice”?
 To buy or not to buy?
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An “absence of meaningful
choice”?
 Did it matter that she made the
purchase in her house?
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“Gross inequality of bargaining power”
 Is the inequality greater when you
purchase at Macy’s?
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“Gross inequality of bargaining power”
OMG!!!
$12.99!!!
I think we can
do better
than that,
don’t you?
“An absence of meaningful choice” unless we can dicker?
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“Gross inequality of bargaining power”
 If there is inequality, how would you
expect the merchant to exploit his
power?
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Procedural Unconscionability
 Is her poverty relevant?
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Procedural Unconscionability
 Is her poverty relevant?
 You mean we let poor people enter into
contracts!?!
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Procedural Unconscionability
 Do you want to argue that Mrs.
Williams was a person of diminished
capacity?
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Procedural Unconscionability
 Do you want to argue that Mrs.
Williams was a person of diminished
capacity?
 An “obvious … lack of education”?
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Procedural Unconscionability
 Do you think, as an empirical matter,
that all people stand on the same
footing when it comes to bargaining
ability or judgment?
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Procedural Unconscionability
 Do you think, as an empirical matter,
that all people stand on the same
footing when it comes to bargaining
ability or judgment?
 And would legal consequences follow
from this?
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Corrective and Distributive Justice
 How would you decide the case as a
matter of corrective justice? Of
distributive justice?
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Distributive Justice
 How would Aristotle allocate goods as
a matter of distributive justice?
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Distributive Justice
 How would Aristotle allocate goods as
a matter of distributive justice?
 And what is merit?
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Corrective Justice
How would this apply in contract law?
 This kind of injustice being an inequality, the
judge tries to equalize it; for in the case also in
which one has received and the other has
inflicted a wound, or one has slain and the
other been slain, the suffering and the action
have been unequally distributed; but the judge
tries to equalize by means of the penalty,
taking away from the gain of the assailant….
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Corrective Justice
How would this apply in contract law?


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These names, both loss and gain, have come from voluntary
exchange; for to have more than one's own is called gaining,
and to have less than one's original share is called losing, e.g.
in buying and selling and in all other matters in which the law
has left people free to make their own terms; but when they
get neither more nor less but just what belongs to themselves,
they say that they have their own and that they neither lose
nor gain.
Therefore the just is intermediate between a sort of gain and a
sort of loss, viz. those which are involuntary; it consists in
having an equal amount before and after the transaction.
Corrective Justice
How would this apply in contract law?
 Suppose we abandon the idea of zerosum transactions, and apply the idea of
corrective justice to fraud or
unconscionability?
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Did it matter what was purchased?
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Did it matter what was purchased?
Suppose it had been
a 10-year subscription
to The New Republic?
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Did it matter what was purchased?
“Man does not live
by bread alone…
He also needs
strawberry jam.”
Lionel Trilling
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Procedural Unconscionability
 Distinguish vices of capacity and vices
of consent
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Procedural Unconscionability
 Did she give her consent to the
clause?
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Procedural Unconscionability
 Did she give her consent to the
clause?
 And just why is a meeting of the minds
a big deal?
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Procedural Unconscionability
 Did she give her consent to the
clause?
 Should consent be conclusively
presumed if one signs a contract?
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Procedural Unconscionability
 Did she give her consent to the
clause?
 Should consent be conclusively
presumed if one signs a contract?
 If not, what’s the point of them?
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Procedural Unconscionability
 Did she give her consent to the
clause?
 Should consent be conclusively
presumed if one signs a contract?
 What if she was seen not to read the
contract?
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Procedural Unconscionability
 Did she give her consent to the
clause?
 Should consent be conclusively
presumed if one signs a contract?
 What about that “rather obscure clause”?
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Procedural Unconscionability
 Did she give her consent to the
clause?
 What about the size of the type? 4 point
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Standard Form Contracts
 Would Skelly Wright enforce any
consumer contract based on a
standard form?
 No “objective manifestation of consent”
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Standard Form Contracts
 Why do vendors employ them?
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The Seven Children
 Do they come into it?
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What remedy was granted?
 What would have happened on
remand?
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You’re Walker-Thomas
 How do you react to the decision?
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UCC 2-302: Does that clarify things?
 § 2-302. Unconscionable contract or
Clause.
 (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…
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Forget Georgetown
Alexandria
88
Best local club
The Birchmere
89
Best Burgers
Five Guys
90
Best Pho
Eden Center, Wilson Bvld. At Seven Corners
91
Best Ethiopian
Bati on George Mason off King Street
92
Best Felafel
Busboys and Poets in Shirlington
93
National Arboretum
94
Arlington Library
Three blocks west
95
The principal tourist attraction
Behind the Jefferson Memorial
96
The next best tourist attraction
1074 Seventh St. NW (at L)
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