Nu Dimensions Figure Salons v. Becerra
| Decision Date | 31 January 1973 |
| Citation | 340 N.Y.S.2d 268,73 Misc.2d 140 |
| Parties | NU DIMENSIONS FIGURE SALONS, Plaintiff, v. Helena BECERRA, Defendant. |
| Court | New York City Court |
Plaintiff, a figure reducing salon, brought this action to recover $300 in damages for breach of contract.
Plaintiff's salon provides a program of food counseling and reducing sessions designed to assist its customers in losing a desired amount of weight. Defendant, a housewife, testified that she was five or six pounds overweight and decided to visit one of plaintiff's salons after seeing its advertisements on television. On March 30, 1972, she went to plaintiff's salon on Hillside Avenue, Queens and discussed her desire to lose weight with plaintiff's manager, Bruce McElroy. Defendant then executed a printed form contract which stated that Nu Dimensions would provide her with a program of 190 reducing sessions, each session lasting one-half hour. The program was to be completed within twelve months and its cost was $300, which was to be paid in 10 successive monthly payments of $30 each. The first payment was due on April 20, 1972.
Paragraph number five of the contract stated in part that 'the sessions purchased are not transferable, refundable or cancellable.' Defendant testified that she was told by the manager, before executing the contract, that she could discontinue the program at any time. However, she was not told that she would have to pay for all the lessons. She also testified that she signed the contract after being subjected to extreme sales pressure. Later that day defendant sent a letter to the plaintiff requesting that the contract be cancelled; plaintiff refused. At the time, defendant sought to cancel the contract, she had not attended any of the sessions or made any of the installment payments.
The court will first consider defendant's attempt to cancel the contract by sending a letter to the plaintiff on the same day she executed the contract. The 'Home Solicitation Sales Act,' Article 10--A of the Personal Property Law, provides in section 427, that a buyer or any other person obligated for any part of the purchase price has the right to cancel a home solicitation sale until midnight of the third business day after the day on which the buyer signed the agreement. The Act singles out for special treatment consumer credit sales in which the transaction is negotiated face-to-face at the residence of the buyer. However, the Act specifically limits the right of cancellation to consumer contracts executed in the buyer's home. Although high pressure salesmanship can be practiced elsewhere, the underlying theory of the Act is that the buyer is more susceptible to making a bad bargain in his home than he is elsewhere. Therefore, if the contract is executed at the office of the seller or someplace other than the buyer's residence the Act does not apply. The Court also notes that a much more liberal Consumer Protection Law, the Federal Consumer Credit Code (Section 2.501) makes the same distinction. In the case at bar the negotiations took place at the plaintiff's place of business and therefore the defendant cannot avail herself of the cancellation rights stated in section 427 of the Act.
The question that this Court must decide is whether the $300 sought represents liquidated damages or is in fact a penalty clause. The contract provides that the 'buyer specifically acknowledged and understands that the sum promised to be paid herein shall be paid whether or not buyer avails herself of the sessions purchased.'
The parties to a contract may agree that a fixed sum is to be paid in case of breach by one of them as an exclusive remedy in lieu of damages. If the Court finds that the sum agreed upon is a fair price for non performance, it is designated as liquidated damages which upon payment settles all obligations for the breach between the parties. However, if the intention is to impose a forfeit or monetary punishment upon the violator, the amount stated as payment is designated a penalty. The effect in such circumstances is to nullify the arrangement for the payment specified. 'Richardson on Contracts,' section 424; Diamond Match Co. v. Roeber, 106 N.Y. 473, 13 N.E. 419; Phoenix Insurance Co. v. Continental Insurance Co., 87 N.Y. 400.
The topic of liquidated damages is discussed in section 2--718 of the Uniform Commercial Code. Paragraph (1) states: ...
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...were hidden in fine print, and whether there was gross inequality of bargaining power. See, e. g., Nu Dimensions Figure Salons v. Becerra, 73 Misc.2d 140, 340 N.Y.S.2d 268 (Sup.Ct.1973). Plaintiffs' argument that the termination provisions were imposed by virtue of "oppressive tactics" resu......
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...757 (1966), Rev'd on issue of damages and aff'd, 54 Misc.2d 119, 281 N.Y.S.2d 965 (App.Div. 1967); Nu Dimensions Figure Salons v. Becerra, 73 Misc.2d 140, 340 N.Y.S.2d 268 (1973); Compare Neal v. Lacob, 31 Ill.App.3d 137, 334 N.E.2d 435 (1st Dist. 1975). Proof of these objective indications......
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...when deciding the issue of unconscionability including whether terms were hidden in fine print. See Nu Dimensions Figure Salons v. Becerra, 73 Misc.2d 140, 340 N.Y.S.2d 268 (1973). When the contract is between two commercial entities, unconscionability must be viewed "in light of the genera......
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