Huff v. Bekins Moving & Storage Co.
1985 Ariz. App. LEXIS 540, 702 P.2d 1341, 145 Ariz. 496 (1985)
Rule of Law:
Conditions precedent within contracts of adhesion are unenforceable if they do not fall within the reasonable expectations of the weaker party or if they are unduly oppressive or unconscionable.
Facts:
- On June 4, 1979, the Huffs entered a contract (Waybill No. P10483) with Bekins for the storage of their household goods in Yuma.
- On June 26, 1980, the Huffs signed another contract with Bekins for the move of their household goods from storage in Yuma to their newly constructed home in Gilbert, Arizona.
- The waybills signed by Huffs required that "within ninety days after such date [of delivery] the Customer presents a claim in writing therefor to the Company, accompanied by paid bill or receipt for charges."
- On July 3, 1980, a truckload of the Huffs' household goods was delivered to Gilbert, for which Huffs gave the driver a check for $2,078.64 to cover storage and shipping charges.
- Upon discovering that only a part of their goods was delivered and that those goods were damaged, Mr. Huff stopped payment on the check and notified Bekins’ Yuma manager.
- On July 8, 1980, the Bekins manager advised Huff that claim forms would be sent, but also stated that the bill had to be paid before Bekins would take any action on their claim.
- On July 12, 1980, the balance of the goods was delivered, and the Huffs subsequently stopped payment on a $163 check given for these additional services as well.
- The Huffs received multiple sets of claim forms from Bekins around July 25, 1980, and again on or about August 7, 1980, but did not fill them out.
Procedural Posture:
- On November 7, 1980, the Huffs filed a 12-count complaint in an unspecified trial court, charging Bekins with damage to and loss of household goods.
- Bekins filed a motion for summary judgment, asserting that the Huffs failed to comply with two conditions precedent: (1) failure to present written claims within 90 days and (2) failure to pay Bekins for services rendered.
- The trial court granted Bekins' motion for summary judgment.
- The Huffs, as appellants, sought reversal of the summary judgment on appeal to the Court of Appeals of Arizona.
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Issue:
Did the trial court err in granting summary judgment for a moving company based on a customer's failure to comply with conditions precedent (presenting a written claim within 90 days and full payment for services) in an adhesion contract, when there is an unresolved factual issue regarding the customer's reasonable expectations of these conditions?
Opinions:
Majority - Hathaway, Judge
Yes, the trial court erred in granting summary judgment because there was an unresolved factual issue regarding the Huffs' reasonable expectations concerning the necessity of payment as a precondition to the processing of their claim under an adhesion contract. The court first established that the contracts between Huffs and Bekins were "contracts of adhesion," defined as standardized contracts imposed by a party with superior bargaining strength, offering the subscribing party only the option to adhere or reject. Citing Graham v. Scissor-Tail, Inc., the court identified two limitations on the enforcement of adhesion contracts: (1) a provision will not be enforced if it does not fall within the reasonable expectations of the weaker party, and (2) a provision will be denied enforcement if, considered in its context, it is unduly oppressive or unconscionable. The court noted that the payment condition precedent was in small print and there was no evidence it was brought to the Huffs' attention prior to signing. Given this, a genuine issue of material fact existed regarding whether this condition was within the Huffs’ reasonable expectations, making summary judgment inappropriate.
Analysis:
This case significantly clarifies the application of the 'reasonable expectations' doctrine to conditions precedent in contracts of adhesion. It underscores the judiciary's role in protecting parties with unequal bargaining power by preventing the enforcement of terms that were not reasonably expected or were unduly oppressive, even if technically agreed upon. The ruling suggests that merely including a term in fine print within a standardized contract may not be sufficient for its enforceability if the weaker party could not reasonably anticipate it. This precedent can influence future contractual disputes involving consumers, employees, or other parties engaging with large corporations, particularly in areas like insurance, banking, or service agreements where standardized forms are prevalent.
