Please read these articles about Tillman v. Commercial Credit Loans, Inc., 655 S.E.2d 362 (N.C. 2008):

Article 1 : http://www.martinandjones.com/Why-Should-I-Choose-Martin-Jones/Newsletters-Brochures/MJNewsletterSpring08.pdf

Article 2 : http://www.spilmanlaw.com/resources/attorney-authored-articles/construction/enforcing-your-arbitration-agreement-just-became-e

Article 3 : http://www.nclitigation.com/2014/02/nc-coa-tillman-substantive-unconscionability-test-no-longer-valid/

1) Do you agree with the Tillman majority or dissent? 

2) Do you think the trial, appeals or high court's decision could have been affected by the sub-prime loan crisis? 

3) Can you find another case where a court found a contract unconscionable?  If so, on what basis? 

4) Based on what you've read, do you believe that you're a party to a contract that might be unconscionable? 

5) How do you balance the Tillman analysis with the idea that a grown adult should be responsible for knowing the deal before signing anything?

Examples: 

Do you agree with the Tillman majority or dissent? 

I agree with the majority opinion on the basis that the clauses prevented reasonable action. In the time frame presented in article one the lender brought 3,700 claims against 0 by the borrowers. The lender clearly took advantage of the borrowers’ desperation and forced unconscionable clauses into the contract. The cost of arbitration exceeded the normal restitution, the anti-class action clause prevented the borrowers from partaking in a cost efficient course of action and the lenders used the clauses in a highly unfair way.

Do you think the trial, appeals or high court's decision could have been affected by the sub-prime loan crisis? 

I think it could have been, but there isn’t much evidence to prove this. I say it could have been because the greed of lenders is cemented into the memory of most adults as a result of the sub-prime crisis. However, I do not remember reading specific mention of such bias occurring, and it is hard to prove the intrinsic thoughts of the courts.

Can you find another case where a court found a contract unconscionable?  If so, on what basis? 

In Armendariz V. Foundation of Health Psychcare the Supreme Court of California found the contract unconscionable on the basis that forcing arbitration would be of extreme detriment to one party. The majority felt that to force arbitration would clearly benefit the employer and harm the employees greatly.

Based on what you've read, do you believe that you're a party to a contract that might be unconscionable? 

I think that the contracts most students, including myself, sign to be allowed to attend high school would qualify. They strictly limit the courses of action that a student can bring against their school, and strengthen the course of action that the school can take. Additionally, I feel that the pressure of needing to go to school eliminates any possibility of the student challenging the agreements.

How do you balance the Tillman analysis with the idea that a grown adult should be responsible for knowing the deal before signing anything?

I balance this quite easily by providing a strict metric like the 3 step test thrown out by SCOTUS. Many adults sign agreements because they are desperate for what is being provided to them. Thus their responsibility is mitigated by their desperation. In the lender situation we see this occur as the borrowers needed money, and would’ve agreed to anything. American Law needs to reflect our desire to protect the most vulnerable.

 

 

 

Do you agree with the Tillman majority or dissent?  

I agree with the Court that Commercial Credit Loans’ arbitration requirement was unconscionable. Commercial Credit created an imbalanced defense against its borrowers by setting terms that required them to redress grievances using a costly arbitration process rather than legal action. The arbitration clause was a barrier against both individual and class action lawsuits from borrowers, which effectively disallowed borrowers from suing the lender in the same courts used by the lender to sue the borrowers. This practice lacked mutuality and effectively prevented borrowers from pursuing redress against the company without risking legal expenses that would likely be higher than the amount of recovery.

Do you think the trial, appeals or high court's decision could have been affected by the sub-prime loan crisis?

I’m not convinced the court’s decision was influenced by the lending crisis. I believe the Tillman case stood on its own merits as an example of a truly unconscionable contract which was rightly deemed detrimental to loan borrowers. That the Tillman case was usurped in North Carolina by the Torrence v. Nationwide Budget Finances case suggests that courts strive to decide cases using the facts of the contract dispute rather than basing decisions on a related but not identical set of events.

Can you find another case where a court found a contract unconscionable?  If so, on what basis?

In Waters v. Min Ltd. the Superior Court of Massachusetts found the contract for the purchase of an annuity from the plaintiff by the defendant unconscionable. The court held that the plaintiff was influenced by her romantic relationship with a man who encouraged her to sell her annuity to the defendant to procure money for their shared drug habit. The plaintiff was young (age 21) and lacked legal counsel at the time her boyfriend arranged for her to sell the annuity to the defendant. The court believed the plaintiff was further disadvantaged due to the fact her boyfriend essentially behaved as the agent to the defendants and acted in his self interest rather than hers. Additionally, the cash payment made to the plaintiff by the defendant in exchange for the annuity was only about ¼ of the actual cash value of the annuity at the time of the transaction, an unfair deal for the plaintiff. For these reasons the Superior Court affirmed the Appeals Court ruling in favor of the plaintiff.

Based on what you've read, do you believe that you're a party to a contract that might be unconscionable?

The Internet comes to mind. Some websites force users to agree to a list of terms and conditions before they can access information or features. Other websites don’t present the terms at all, as use of the website alone is consent to their terms. I can’t count the number of times I’ve checked the “I agree” box on a webpage without judiciously studying what exactly I’m agreeing to just to continue reading an article or making a purchase. It’s certainly possible by doing so I’ve consented to terms I would find unacceptable, perhaps even unconscionable, if I’d taken the time to read the agreement.

How do you balance the Tillman analysis with the idea that a grown adult should be responsible for knowing the deal before signing anything?

Language in contracts should be written so they can be understood by a layperson, and clauses which affect enforcement of the contact in the legal system should be clear to both signing parties. Parties should not have to have law education to understand the terms and conditions of the contract they are about to sign. Courts could throw out contracts that incorporate undue legalese or bury important terms in the text of the document.