Question

E-mation entered into a contract with a consumer, Ezra, a recent immigrant to the United States, who spoke very little English, and had no formal education. The contract provided for Ezra to pay $2500 for a computer system. The system was worth $400. If E-mation sued Ezra for enforcement the contract, what is the most likely result?

a) The contract is enforceable because of the Statute of Frauds.
b) The contract is enforceable because of the parol evidence rule.
c) The contract is enforceable because of the underlying reference rule.
d) The contract is unenforceable because it is unconscionable.

Answer 1

The contract between E-mation and Ezra is likely unenforceable due to it being unconscionable, as the immense disparity in the contract's value and Ezra's limited ability to understand the terms indicate exploitation.

Step-by-step explanation:

If E-mation sued Ezra for enforcement of the contract where Ezra was to pay $2500 for a computer system worth only $400, the most likely result is that the contract is unenforceable because it is unconscionable. An unconscionable contract is one that is so unjust or one-sided that it would be unreasonable to enforce it. Given that Ezra is a recent immigrant with limited English proficiency and no formal education, the disparity in the value of the contract could indicate that E-mation took advantage of Ezra's situation, which the law typically frowns upon. Although the Statute of Frauds and the parol evidence rule are important contract principles, they do not apply to the question of unconscionability; the former pertains to the requirements for certain contracts to be in writing and the latter to the admissibility of extrinsic evidence to interpret written contracts. Neither of these rules would make an unconscionable contract enforceable. Underlying reference rule is not a commonly recognized legal principle or rule in contract law.