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Access Computer Rentals USA, Inc. v. Cicco

A-2976-97T5 (N.J. Super. App. Div. 1999) (Unpublished)

CONTRACTS; UNCONSCIONABILITY—Imposing a higher monthly rental rate for an early lease termination is not unconscionable where the rate is a reasonable one, there has been no overreaching, and if it is contained in any written agreement (even if not in all agreements) between a consumer and a leasing company.

A customer rented a computer and computer equipment pursuant to a “rental confirmation” and a rental agreement. The rental agreement provided that if the leasing agreement was terminated prior to its scheduled expiration date, a higher monthly rental would be charged. The customer, alleging that the equipment did not work properly, returned the equipment early and refused to make further payment. The lower court found that the customer was wrong in making that allegation and had improperly terminated the agreement. In response to a collection action, the customer claimed that the rental agreement was unconscionable in light of the higher rental rate for termination prior to expiration. According to the Court, the “doctrine of unconscionability is an amorphous concept designed to establish a broad business ethic” and is a factor when there exists “grossly disproportionate bargaining power” that results in “a grossly unfair contractual provision.” It has also been defined as the “absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.” According to the Court, in this case there was sufficient credible evidence to support the lower court’s findings of fact and conclusions of law. Prior to signing the contract, the customer was informed of the rental terms and conditions, including the higher rental payments for early termination. By its own admission, the customer had called several computer outlets and found that the leasing company’s rates were comparable to theirs. Consequently, the Court held that the record supported the conclusion that the parties entered into an arm’s length transaction with equal bargaining power. The customer further asserted that the leasing company should have included the early leasing termination provision in all of the agreements for the computer equipment. It contended that only the earlier “rental confirmation” contained the information. The Court held that it was not necessary that all the documents contain the early termination provision. It found no violation of the Consumer Fraud Act because the provision was within the documents. It also held that the leasing company acted in good faith, committed no unconscionable commercial practices, and was not unfair in its dealings. Therefore, the customer’s claim under the Consumer Fraud Act was rejected.

The leasing company contended that the contract terms entitled it to an award of attorney’s fees for the appeal. The lease agreement stated: “[i]f payment is more than 15 days late, customer will be in default of the agreement and will be responsible for all collection fees, attorney’s fees, pick up charges and early termination fees.” Consequently, the question was whether this provision included counsel fees on appeal. To the Court, it appeared that the parties contractually intended to include as part of the agreement counsel fees necessary to collect the debt. The appeal was undertaken by the customer and, as such, it became part of the process to collect the fees. Therefore, the leasing company was granted leave to move for inclusion of its reasonable attorney’s fees within the judgment that it was granted against its customer.


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