Waters v. Min Ltd.
Supreme Judicial Court of Massachusetts, 1992.
Facts: Waters owned an annuity that was worth $189,000 in present value and $694,000 over its guaranteed term.† Waters starting dating Beauchemin, who got her into drugs.† She was persuaded to sell her annuity to the defendants for $50,000.† Waters didnít have a lawyer, but the defendants did.† The contract was also executed under unusual circumstances.† Waters sued to rescind the contract on the basis on unconscionablity.† The defendants counterclaimed for specific performance of the contract.† The trial court found for Waters, and the defendants appealed.
Issue: Is the contract unconscionable such that it should be rescinded?
Rule: Unconscionability is decided on a case-by-case basis, with consideration of the following factors:
1. The oppressiveness of the contract upon the disadvantaged party
2. Unfair surprise to the disadvantaged party
3. Allocation of risk to the disadvantaged party due to superior bargaining power on the part of the stronger party
4. Gross disparity in consideration
5. Evidence that the stronger party knowingly took advantage of the weaker party
6. The presence of high pressure sales tactics or misrepresentation
Analysis: The trial court basically found that the defendants, especially Beauchemin, were bad people trying to take advantage of the plaintiff.† The court cites numerous facts that support this view.† The defendants were more or less robbing the plaintiff of $150,000 and giving nothing in return.
Conclusion: The trial courtís decision is upheld and the contract is rescinded.