Unico v. Owen case brief

Unico v. Owen case brief summary
232 A.2d 405 (1967)

CASE SYNOPSIS

Plaintiff appealed from the appellate court (New Jersey) decision affirming the district court's judgment for defendant in an action on a note pursuant to N.J. Stat. Ann. § 7:2-52 (amended 1961).

CASE FACTS
Defendant's wife agreed to purchase albums on an installment basis, signing a retail installment contract including a promissory note. Defendant paid some of the installments, despite a high interest rate on payments, but quit paying after the company became insolvent and stopped sending records. The lower court found defendant was not obligated to pay the note held by plaintiff finance company.

DISCUSSION

• The court agreed because, in the context of consumer goods, contracts, financing agreements were to be construed against the seller. 
• Plaintiff was not a holder in due course because it was closely involved in the seller' business, participated in the contractual arrangements, and had agreed to take the paper. 
• The clause in the contract waiving defenses against the assignee was invalid as against public policy because of the statutory purpose of preserving defenses and the agreement's unconscionability.

CONCLUSION
The lower court's judgment was affirmed because in the context of consumer goods contracts, financing agreements were to be construed against the seller, plaintiff was not a holder in due course because it participated in the contractual arrangements, and the clause waiving defenses against the assignee was invalid as against public policy.

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