Batsakis v. Demotsis
226 S.W.2d 673 (Tex.Civ.App.-El Paso 1949)
was caught in Greece during WWII and borrowed 500,000 drachma (aka $25)
from Batsaki, until she could get money from America.She signed an IOU and an agreement
to pay $2000 plus 8% interest at some point after the war was over.
A few years later when Batsaki came to collect his debt, Demotsis
declared that there was a wantonfailure
of consideration, and offered $25 plus
interest.Batsakis wanted all
the money and sued.
Court found for Batsakis and ordered Demotsis to pay $750 plus interest.
did the Trial Court come up with $750?
appealed claiming that the contract was so lopsided, it amounted to a lack of consideration.
Court affirmed the decision.
The Appellate Court
found that "mere inadequacy of a consideration will not void the
that means that just because the bargain is unfair, that doesn't mean
that the contract should be invalid.
Court will not inquire into the adequacy of consideration.
has become a very accepted proposition in Contract Law.
case had a very different result than Fischer v. Union Trust Co. (138 Mich. 612, 101 N.W. 852 (Mich. 1904)). In that case, the Court found that if the deal was very lopsided,
it did not constitute consideration.
some jurisdictions, charging more than a certain % interest is illegal (usury
laws).This was over 2000% interest.If there was a usury law in effect, there could
have been a basis to make the contract illegal.
reason a contract can be void is if it is made under duress.Was Demotsis, who was fleeing a Nazi invasion under duress?
was not putting her under duress, is there a difference between whether
the reason for duress has to do with one of the people involved in the
Batsakis' behavior count as price gouging?
there is a limited supply, raising prices will mean only people who
really want it, and have a lot of money can get it.But, in economic terms, more
people would supply the item, so more people would be able to get the