Waters v. Min Ltd.
Supreme Judicial Court of Massachusetts,
1992.
412
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 didn’t 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rescinded?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 court’s decision is upheld and the contract
is rescinded.