KELLY, Associate Judge.
According to an agreed statement of proceedings and evidence the appellant, Mrs. Bernice Patterson, bought merchandise from appellee in three separate transactions during 1968. In January she bought an 18-inch Emerson portable television, with stand, for $295.95, signing an installment contract which obligated her to pay appellee $20 a month on account. In March she bought a five-piece dinette set for $119.95, increasing her monthly payments to $24. In July she purchased a set of wedding rings for $159.95 and the payments rose to $25 per month. The total price for all the goods, including sales tax, was $597.25. Mrs. Patterson defaulted in her payments after she had paid a total of $248.40 toward the agreed purchase price.
Appellant answered
Walker-Thomas’' action to recover the unpaid balance on the contracts by claiming, in pertinent part,
that she had paid an amount in excess of the fair value of the goods received and that the goods themselves were so grossly overpriced as to render the contract terms unconscionable and the contracts unenforceable under the Uniform Commercial Code as enacted in the District of Columbia.
Objections to interrogatories addressed to appellee in an effort to establish her defense that the goods were in fact grossly overpriced were sustained, the court ruling in part that the information sought was outside the scope of discovery “because the defense of unconscionability based on price is not recognized in this jurisdiction”. It ruled further “that certain information sought was readily obtainable to defendant by resort to the contracts admittedly in her possession and that certain of the interrogatories amounted to ‘harassment of the business community’.”
Appellant persisted in her efforts to present the defense of unconscionability by issuing a subpoena
duces tecum
for the production of appellee’s records, and, alleging indigency, by moving for the appointment of a special master or expert witness to establish the value of the goods, the price Walker-Thomas paid for them, and their condition (whether new or secondhand) when she purchased them. The pretrial judge quashed the subpoena
duces tecum
on the ground that appellant was precluded from obtaining the same information by means of the subpoena that she had been denied through the use of interrogatories. The motion to appoint a special master or expert witness was also denied.
A trial judge subsequently held that the prior rulings of the motions judge and the pretrial judge established the law of the
case. Inasmuch as appellant’s then sole defense was that the goods were grossly overpriced and no proof on this issue was presented, the court entered judgment for appellee.
We affirm.
Suggested guidelines for deciding whether or not a contract is unconscionable appear in Williams v. Walker-Thomas Furniture Co., 121 U.S.App.D.C. 315, 319-320, 350 F.2d 445, 449-450, 18 A.L.R.3d 1297, 1301-1303 (1965), as follows:
Unconscionability has generally been recognized to include an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party. Whether a meaningful choice is present in a particular case can only be determined by consideration of all the circumstances surrounding the transaction. In many cases the meaningfulness of the choice is negated by a gross inequality of bargaining power.
In determining reasonableness or fairness, the primary concern must be with the terms of the contract considered in light of the circumstances existing when the contract was made. The test is not simple, nor can it be mechanically applied. The terms are to be considered “in the light of the general commercial background and the commercial needs of the particular trade or case.” Corbin suggests the test as being whether the terms are “so extreme as to appear unconscionable according to the mores and business practices of the time and place.” (Citation omitted.) We think this formulation correctly states the test to be applied in those cases where no meaningful choice was exercised upon entering the contract. (Footnotes omitted.)
Later, citing
Williams
in another context, this court said that “two elements are required to exist to prove unconscionability; i. e., 'an absence of meaningful choice on the part of one of the parties together with contract terms which are
unreasonably favorable to the other party.’ ”
Diamond Housing Corp. v. Robinson, D.C. App., 257 A.2d 492, 493 (1969). (Emphasis in the original.)
On the basis of these authorities we conclude that in a proper case gross overpricing may be raised in defense as an element of unconscionability.
Under the test outlined in
Williams
price is necessarily an element to be examined when determining whether a contract is reasonable. The Corbin test mentioned in the opinion specifically deals with the “terms”
of the contract and certainly the price one pays for an item is one of the more important terms of any contract. We emphasize, however, that price as an unreasonable contract term is only one of the elements which underpin proof of uncon-sionability. Specifically, therefore, in the instant case the reasonableness of the contracts is not to be gauged by an examination of the price stipulation alone or any other term of the contract without parallel consideration being given to whether or not appellant exercised a meaningful choice in entering into the contracts.
We conclude also that because excessive price-value may comprise one element of unconscionability, discovery techniques may be employed to garner information relevant to that issue for purposes of defense. By statute, upon a claim of unconscionability, the court determines as a matter of law whether a contract or any clause thereof is unconscionable
only
after the parties have been given a reasonable opportunity to present evidence as to its commercial setting, purpose and effect. Certainly, therefore, interrogatories may be used to develop evidence of the commercial setting, purpose and effect of a contract at the time it was made in order to assure an effective presentation of the defense at an evidentiary hearing.
In our judgment, however, appellant here was not erroneously precluded from developing evidence through the use of interrogatories by the ruling of the trial court. Having said that under proper circumstances excessive price may be a component of the defense of unconscionability and that discovery techniques may be used to develop that defense, we are nevertheless of the opinion that a sufficient factual predicate for the defense must be alleged before wholesale discovery is allowed.
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KELLY, Associate Judge.
According to an agreed statement of proceedings and evidence the appellant, Mrs. Bernice Patterson, bought merchandise from appellee in three separate transactions during 1968. In January she bought an 18-inch Emerson portable television, with stand, for $295.95, signing an installment contract which obligated her to pay appellee $20 a month on account. In March she bought a five-piece dinette set for $119.95, increasing her monthly payments to $24. In July she purchased a set of wedding rings for $159.95 and the payments rose to $25 per month. The total price for all the goods, including sales tax, was $597.25. Mrs. Patterson defaulted in her payments after she had paid a total of $248.40 toward the agreed purchase price.
Appellant answered
Walker-Thomas’' action to recover the unpaid balance on the contracts by claiming, in pertinent part,
that she had paid an amount in excess of the fair value of the goods received and that the goods themselves were so grossly overpriced as to render the contract terms unconscionable and the contracts unenforceable under the Uniform Commercial Code as enacted in the District of Columbia.
Objections to interrogatories addressed to appellee in an effort to establish her defense that the goods were in fact grossly overpriced were sustained, the court ruling in part that the information sought was outside the scope of discovery “because the defense of unconscionability based on price is not recognized in this jurisdiction”. It ruled further “that certain information sought was readily obtainable to defendant by resort to the contracts admittedly in her possession and that certain of the interrogatories amounted to ‘harassment of the business community’.”
Appellant persisted in her efforts to present the defense of unconscionability by issuing a subpoena
duces tecum
for the production of appellee’s records, and, alleging indigency, by moving for the appointment of a special master or expert witness to establish the value of the goods, the price Walker-Thomas paid for them, and their condition (whether new or secondhand) when she purchased them. The pretrial judge quashed the subpoena
duces tecum
on the ground that appellant was precluded from obtaining the same information by means of the subpoena that she had been denied through the use of interrogatories. The motion to appoint a special master or expert witness was also denied.
A trial judge subsequently held that the prior rulings of the motions judge and the pretrial judge established the law of the
case. Inasmuch as appellant’s then sole defense was that the goods were grossly overpriced and no proof on this issue was presented, the court entered judgment for appellee.
We affirm.
Suggested guidelines for deciding whether or not a contract is unconscionable appear in Williams v. Walker-Thomas Furniture Co., 121 U.S.App.D.C. 315, 319-320, 350 F.2d 445, 449-450, 18 A.L.R.3d 1297, 1301-1303 (1965), as follows:
Unconscionability has generally been recognized to include an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party. Whether a meaningful choice is present in a particular case can only be determined by consideration of all the circumstances surrounding the transaction. In many cases the meaningfulness of the choice is negated by a gross inequality of bargaining power.
In determining reasonableness or fairness, the primary concern must be with the terms of the contract considered in light of the circumstances existing when the contract was made. The test is not simple, nor can it be mechanically applied. The terms are to be considered “in the light of the general commercial background and the commercial needs of the particular trade or case.” Corbin suggests the test as being whether the terms are “so extreme as to appear unconscionable according to the mores and business practices of the time and place.” (Citation omitted.) We think this formulation correctly states the test to be applied in those cases where no meaningful choice was exercised upon entering the contract. (Footnotes omitted.)
Later, citing
Williams
in another context, this court said that “two elements are required to exist to prove unconscionability; i. e., 'an absence of meaningful choice on the part of one of the parties together with contract terms which are
unreasonably favorable to the other party.’ ”
Diamond Housing Corp. v. Robinson, D.C. App., 257 A.2d 492, 493 (1969). (Emphasis in the original.)
On the basis of these authorities we conclude that in a proper case gross overpricing may be raised in defense as an element of unconscionability.
Under the test outlined in
Williams
price is necessarily an element to be examined when determining whether a contract is reasonable. The Corbin test mentioned in the opinion specifically deals with the “terms”
of the contract and certainly the price one pays for an item is one of the more important terms of any contract. We emphasize, however, that price as an unreasonable contract term is only one of the elements which underpin proof of uncon-sionability. Specifically, therefore, in the instant case the reasonableness of the contracts is not to be gauged by an examination of the price stipulation alone or any other term of the contract without parallel consideration being given to whether or not appellant exercised a meaningful choice in entering into the contracts.
We conclude also that because excessive price-value may comprise one element of unconscionability, discovery techniques may be employed to garner information relevant to that issue for purposes of defense. By statute, upon a claim of unconscionability, the court determines as a matter of law whether a contract or any clause thereof is unconscionable
only
after the parties have been given a reasonable opportunity to present evidence as to its commercial setting, purpose and effect. Certainly, therefore, interrogatories may be used to develop evidence of the commercial setting, purpose and effect of a contract at the time it was made in order to assure an effective presentation of the defense at an evidentiary hearing.
In our judgment, however, appellant here was not erroneously precluded from developing evidence through the use of interrogatories by the ruling of the trial court. Having said that under proper circumstances excessive price may be a component of the defense of unconscionability and that discovery techniques may be used to develop that defense, we are nevertheless of the opinion that a sufficient factual predicate for the defense must be alleged before wholesale discovery is allowed. An unsupported conclusory allegation in the answer that a contract is unenforceable as unconscionable is not enough. Sufficient facts surrounding the “commercial setting, purpose and effect” of a contract at the time it was made should be alleged so that the court may form a judgment as to the existence of a valid claim of unconscion-ability and the extent to which discovery of evidence to support that claim should be allowed.
Admittedly, appellant neither alleged nor attempted to prove the existence of any fraud, duress or coercion when she entered into the instant contracts. Her verified complaint alleges only that the goods she purchased and still retains were grossly overpriced and that she has already paid appellee a sum in excess of their fair value. These are conclusions without factual support. It cannot be said that the goods were grossly overpriced merely from an examination of the prices which appear on the face of the contracts. No other term of the contract is alleged to be unconscionable, nor is an absence of meaningful choice claimed.
We hold that the two elements of which unconscionability is comprised; namely, an absence of meaningful choice and contract terms unreasonably favorable to the other party, must be particularized in some detail before a merchant is required to divulge his pricing policies through interrogatories or through the production of records in court.
An answer, such as the one here, asserting the affirmative defense of unconscionability only on the basis of a stated conclusion that the price is excessive is insufficient.
Accordingly, the judgment of the trial court is
Affirmed.