Takem's Appliances And Electronics Llc Case Summary
Research Project 1
Takem’s Appliances and Electronics, LLC (Takem’s), owned and operated by Tommy Takem (Takem), and in the business of selling appliances and electronics to consumer clients in the Appalachian regions of Virginia, Kentucky, Tennessee, and West Virginia, recently added a door-to-door (DTD) sales division. Upon the visit of Mrs. Sally Walker (Walker), a team member closed the sale of one new laptop computer. Walker signed three documents including a bill of sale, a security agreement, and a negotiable promissory note in acquiring the laptop computer before recently defaulting on her payments, resulting in Takem’s initiation of collection. Takem then received a letter bearing the signature of Walker expressing much discontent …show more content…
2) Would establishing a financing company, in which Takem’s would sell their promissory notes to, hence allowing the company to become a holder-in-due-course, be advisable? 3) Is Takem’s business model morally and ethically sound?
First, I believe the claim made by Walker regarding an unenforceable contract to be inaccurate. Although this scenario aligns with the case of Williams v. Walker-Thomas Furniture Co. in some ways, there are material differences between the two, along with modern interpretations of unconscionability that I believe to be in favor of Takem’s.
Secondly, I advise Takem that the formation of a separate financing company would be in conflict with rules established by the Federal Trade Commission (FTC) to prevent the abuse of the holder-in-due-course …show more content…
Pro rata is defined as, “A method of assigning an amount to a fraction, according to its share of the whole” (Investopedia, 2015). In other words, with each purchase that Williams made, the company financed a new amount. Then, when payment was received, WTFC would allocate a fraction of that payment to each outstanding liability. This resulted in a situation where no single item could be paid off, in full, until all items were paid for. This is a very important piece of information because it resulted in the growth of her overall liability that led to the grossly unequal consideration. This is made evident by the fact that WTFC moved to repossess some $1800 worth of furniture, yet Williams balance was a mere $164 before purchasing the stereo (Korobkin, 2003). In Takem’s scenario, Walker financed one item (the laptop) that she agreed to make payments toward
Takem’s Appliances and Electronics, LLC (Takem’s), owned and operated by Tommy Takem (Takem), and in the business of selling appliances and electronics to consumer clients in the Appalachian regions of Virginia, Kentucky, Tennessee, and West Virginia, recently added a door-to-door (DTD) sales division. Upon the visit of Mrs. Sally Walker (Walker), a team member closed the sale of one new laptop computer. Walker signed three documents including a bill of sale, a security agreement, and a negotiable promissory note in acquiring the laptop computer before recently defaulting on her payments, resulting in Takem’s initiation of collection. Takem then received a letter bearing the signature of Walker expressing much discontent …show more content…
2) Would establishing a financing company, in which Takem’s would sell their promissory notes to, hence allowing the company to become a holder-in-due-course, be advisable? 3) Is Takem’s business model morally and ethically sound?
First, I believe the claim made by Walker regarding an unenforceable contract to be inaccurate. Although this scenario aligns with the case of Williams v. Walker-Thomas Furniture Co. in some ways, there are material differences between the two, along with modern interpretations of unconscionability that I believe to be in favor of Takem’s.
Secondly, I advise Takem that the formation of a separate financing company would be in conflict with rules established by the Federal Trade Commission (FTC) to prevent the abuse of the holder-in-due-course …show more content…
Pro rata is defined as, “A method of assigning an amount to a fraction, according to its share of the whole” (Investopedia, 2015). In other words, with each purchase that Williams made, the company financed a new amount. Then, when payment was received, WTFC would allocate a fraction of that payment to each outstanding liability. This resulted in a situation where no single item could be paid off, in full, until all items were paid for. This is a very important piece of information because it resulted in the growth of her overall liability that led to the grossly unequal consideration. This is made evident by the fact that WTFC moved to repossess some $1800 worth of furniture, yet Williams balance was a mere $164 before purchasing the stereo (Korobkin, 2003). In Takem’s scenario, Walker financed one item (the laptop) that she agreed to make payments toward