Wednesday, December 25, 2013

Waters v. Min Ltd. case brief

Waters v. Min Ltd. case brief summary
587 N.E.2d 231 (Mass. 1992)

CASE SYNOPSIS
Defendant buyers challenged an order of a Superior Court (Massachusetts), which rescinded their contract to purchase an annuity from plaintiff seller on the grounds of unconscionability. The superior court also dismissed defendants' counterclaim for specific performance.

CASE FACTS
Plaintiff seller owned an annuity with a cash value of $ 189,000 and long-term value of $ 694,000. Her boyfriend introduced her to drugs, exhausted her credit card resources, and used his influence with her to convince her to sell the annuity to defendants, to whom he owed money, for $ 50,000. Plaintiff filed an action to rescind the contract. Defendants counterclaimed for a declaratory judgment and specific performance. The superior court rescinded the contract on grounds of unconscionability.

DISCUSSION

  • On appeal, the court affirmed. 
  • Applying both the principles of common law and their incorporation into the Uniform Commercial Code, the court agreed that the contract was unconscionable. 
  • The court remarked that the gross disparity between the value given in exchange for the $50,000 payment was reason alone to rescind the contract for unconscionability. 
  • The agreement was not one that any person in her right mind would have made on the one hand and that no honest and fair person would have accepted on the other hand. 
  • Combining these features with the undue influence of defendants' agent, the boyfriend, and other irregularities of the contract rendered it unenforceable.
CONCLUSION
The court affirmed the superior court's order that rescinded the contract in which defendant buyers agreed to purchase plaintiff seller's annuity, with a cash value of $ 189,000 and a long-term value of $ 694,000, for $ 50,000. The court agreed that the irregular circumstances surrounding the sale and the amount of the consideration made the sale unconscionable under both common law principles and the Uniform Commercial Code.

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