Page:State ex rel. Bryant v. R & A Investment Co.pdf/8

296   [6] As this action is based on admittedly usurious contracts, we rely on this state's established contract law to define "unconscionable." Although this court has not directly addressed this particular issue, our court of appeals has established a test for determining unconscionability in contract cases. In ''Arkansas Nat'l Lye Ins. Co. v. Durbin'', 3 Ark. App. 170, 174–175, 623 S.W.2d 548, 551 (1981), the court of appeals explained:

"In assessing whether a particular contract or provision is unconscionable, the courts should review the totality of the circumstances surrounding the negotiation and execution of the contract. Two important considerations are whether there is a gross inequality of bargaining power between the parties to the contract and whether the aggrieved party was made aware of and comprehended the provision in question. Geldermann & Company, Inc. v. Lane Processing, Inc., 527 F.2d 571 (8th Cir. 1975); see also, Mississippi Home Insurance Company v. Adams, 84 Ark. 431, 106 S.W. 209 (1907)."

See also Associated Press v. Southern Arkansas Radio Co., 34 Ark. App. 211, 809 S.W.2d 695 (1991) (holding that under the Uniform Commercial Code, the determination of unconscionability is a mixed question of fact and law).

[7] Here, the trial court specifically concluded that the State had established a prima facie case that Mid South's business practices were unconscionable. The trial court also concluded that section 4-88-107(a)(10) does not conflict with the usury provisions set forth in art. 19, § 13. Moreover, the purpose of Arkansas's strong anti-usury policy, as reflected by the prohibition of usury in our constitution, is to protect borrowers from excessive interest rates. Quinn-Moore v. Lambert, 272 Ark. 324, 614 S.W.2d 230 (1981). The General Assembly's intent to protect consumers by passing the DTPA promotes the purposes of art. 19, § 13, by making its provisions effective for consumers who are not likely to have financial means to obtain legal assistance to bring individual actions, who are unlikely to be aware of their legal rights, and who have no choice but to continue paying illegal rates, while Mid South knowingly violates the law. [8] We therefore hold that the DTPA is broad enough to encompass Mid South's scheme, which is contrary to Arkansas's