Hart v. Whittle

A-913-96T2 (N.J. Super. App. Div. 1998) (Unpublished)
  • Opinion Date: May 1, 1998

CONSUMER FRAUD; UNCONSCIONABILITY—In a consumer transaction where the contract price is fifteen times the value of the work, the contract is unconscionable and violates the Consumer Fraud Act.

An elderly widow requested a contractor to make some repairs to her house’s chimney so as to prevent racoons from climbing through it. The contractor inspected the chimney, placed a temporary wire cover on the chimney, and told the homeowner that the chimney needed repairs costing $7,800. The contractor prepared a contract at the kitchen table and the homeowner, despite feeling intimidated by the contractor’s demeanor, signed the contract. During the course of the work, the homeowner asked a neighbor with experience in repairing chimneys to examine the work. Upon examination, the neighbor told the contractor to stop all work and to leave the premises. According to testimony in court, the reasonable cost of the work to be done by the contractor should have been less than $500, which was one-fifteenth of the amount of the contract.

The Court found that the contractor had violated the Consumer Fraud Act in the following two respects: (1) it had delivered materials to the home before any contract was signed for that purpose and placed undue pressure on the homeowner to enter into the contract, and (2) the contract price was unconscionable. A contract is unenforceable if its terms are manifestly unfair or oppressive and are dictated by a dominant party. Unconscionability can arise from overreaching or imposition resulting from a bargaining disparity between the parties or from such patent unfairness in the contract that no reasonable person not acting under compulsion or out of necessity would accept its terms. In addition, precedent has held that a finding of unconscionability can be based on price alone. The contractor, therefore, was unsuccessful in a suit against the homeowner for payment on the contract.