Question

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 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 thought he was signing a permission slip allowing the salesman to conduct a free water test to determine the toxins in the water. How would a court most likely describe this contract?a. The contract is fully enforceable as written.b. The contract is enforceable, but only up to the value of the water system.c. The contract is unenforceable because it is exculpatory.d. The contract is unenforceable because it is unconscionable.

Answer 1

The correct answer is D) The contract is unenforceable because it is unconscionable.

Step-by-step explanation:

The contract described in the question is extremely unconscionable. It is inmensely unfavorable for Mike. Not only is Mike a very poor, disabled person who probably did not know what he was signing, but even if Mike had more or less understood the contract, it would still so unfair to the point of being unenforceable.

The water system is worth $1,000, and the contract signed requires monthly payments of $500 for ten years!, therefore, the amount of money paid at the end of the contract would be:

$500 x 120 = $60,000! a value way higher than the $1,000 the product is worth.