Mike owns a house in a poor area of a large city.Mike is on disability and his total monthly income is $700.A sales representative visits his home,selling a water purification system.Mike buys and signs a contract that calls for monthly payments of $500 for the next 10 years.The water system is worth no more than $1000.Mike did not understand what he was signing and thought it was a permission slip allowing the salesman to conduct a free water test to determine the number of toxins in the water.A court would most likely find this contract:
A) fully enforceable as written.
B) unenforceable because it is unconscionable.
C) unenforceable because it is illusory.
D) unenforceable because it is exculpatory.

Question

Quizplus · Accepted Answer

The court would most likely find this contract unenforceable because it is unconscionable. An unconscionable contract is one in which one of the parties has significantly more bargaining power than the other and takes advantage of that power to create a contract that is overly advantageous to them. In this case, the sales representative took advantage of Mike's financial situation and lack of understanding to sell him a product at a highly inflated price with unreasonable payment terms. This is an example of an unconscionable contract and would likely not be enforced by a court. Additionally, the fact that Mike did not fully understand what he was signing and thought it was a permission slip supports the argument that he was taken advantage of and did not have equal bargaining power in the transaction.

Mike Owns a House in a Poor Area of a Large