Zapatha V Diary Mart, Inc.

381 Mass. 284, 408 N.E.2d 1370 (1980)

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Nature of the Case

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Facts

P is a high school graduate who had attended college for one year and had also taken college evening courses in business administration and business law. P was employed by a company engaged in the business of electroplating. He rose through the ranks to foreman and then to the position of operations manager, at one time being in charge of all metal finishing in the plant with 150 people working under him. In May 1973, he was discharged. P met with D and signed an application to be considered for a franchise. When signing the agreement, D told P to take the agreement to a lawyer but stated that the terms were non-negotiable. The termination provision allowed either party, after twelve months, to terminate the agreement without cause on ninety days' written notice. In the event of termination initiated by it without cause, Dairy Mart agreed to repurchase the saleable merchandise inventory at retail prices, less 20%. In 1974, another store became available and P elected to surrender the Agawam store. They executed a new franchise agreement, on an identical printed form, relating to the new location. Things proceeded quite well for the next few years until D presented P with a new franchise agreement. P refused to sign the new form and D terminated the relationship as per the original franchise agreement. P sued stating that the clause for termination without cause was unconscionable and that D's conduct was unfair and deceptive. The trial court found the termination provision unconscionable and that the UCC provisions applied to the contract. D appealed.