
Contract Law: Williams v. Walker-Thomas Furniture (Installment Loan Contracts)
Yale law professor Ian Ayres uses Williams v. Walker-Thomas Furniture Co. to introduce the doctrine of unconscionability in contract law. The case involves a Washington D.C. furniture store's installment loan plan that let a single missed payment on a new purchase put all previously purchased items at risk of repossession, even ones nearly paid off. Ayres walks through the cross-collateral clause buried in the contract, the customer's limited bargaining power, and the court's reasoning about procedural and substantive unconscionability. He connects the case to broader questions about when courts should refuse to enforce a validly signed contract because its terms or the circumstances of its formation were unfair. The lecture is drawn from Ayres' Coursera course American Contract Law I and II, part of a numbered series, and runs about sixteen minutes with a case file referenced for students to consult directly.