Question

46
multiple choice 4 points
e-mation entered into a contract with a consumer, ezra. ezra was a recent immigrant to the united states, 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 under the contract, what is the most likely result?
the contract is enforceable because of the statute of frauds.
the contract is enforceable because of the parol evidence rule.
the contract is enforceable because of the underlying reference rule
the contract is unenforceable because it is unconscionable.

Explanation:

A contract is unenforceable if it is unconscionable. Unconscionability can occur when there is a significant disparity in bargaining power and the terms are unfair. Here, Ezra, a recent immigrant with little English and no formal education, is asked to pay $2500 for a $400 computer system. This shows a lack of meaningful choice (due to his situation) and overly harsh terms (price - value disparity), which are elements of an unconscionable contract. The Statute of Frauds (requires certain contracts to be in writing), parol evidence rule (about excluding prior oral agreements when there is a written contract), and underlying reference rule (not a standard contract - law rule in this context) do not address the fairness of the contract terms.

Answer:

The contract is unenforceable because it is unconscionable.