Hartland Computer V. the Insurance Man

Hartland Computer v. The Insurance Man

Essential Facts: The Insurance Man selected computer equipment that it wanted to lease from Hartland. Hartland bought the equipment from Multitask (the vendor) that The Insurance Man specified and leased it to them with a price and contract. The lease stated that Hartland made no warranties on the equipment and they were to be leased on an “as-is” basis at a price of 229.16 per month for 36 months. They also stated that the lessee should seek help from the vendor if problems arise. When problems arose, The Insurance Man went to the vendor and got the faulty equipment exchanged under warranty. However, when the equipment broke for a second time, The Insurance Man simply stopped paying for the lease. When The Insurance Man was contacted about the lease payments they stated that they did not want the machine anymore and that Hartland should sell it and they would settle the difference. The Hartland Computer Leasing Corp then sued The Insurance Man for breach of contract. Decision of lower court was that the court found the contract to be a contract of adhesion and this means that the lessee was free to disregard disclaimer of all warranties and ruled in favor of The Insurance Man.

Issues: Was the contract between Hartland Computer and The Insurance Man a contract of adhesion?

Resolution: The court overturned the ruling and ruled in favor of Hartland Computer.

Rationale: In Missouri, an adhesion contract is a contract imposed by a stronger party upon a weaker party. If the situation is found to be unexpected and unfair then it would be unenforceable. Otherwise, courts still try to seek and enforce the reasonable expectations of the contract. In order to do this, the test for “reasonable expectations” is objective. Even though the lessor expressed that they would not cover warranties,