The Maxwells (plaintiffs) financed the purchase of a $6,500 water heater with a loan from Fidelity Financial Services (Fidelity) (defendant) in 1984 at 19.5 percent interest. Elizabeth Maxwell earned approximately $400 per month working part-time as a hotel maid and her husband earned approximately $1,800 per month working for the local paper. The market value of the Maxwells’ home was $40,000. Fidelity secured the transaction with a lien of the water heater and a lien on the home. After making payments for three and a half years and despite the fact that the water heater never functioned properly, Maxwell requested another loan from Fidelity. Fidelity approved the loan and the Maxwells signed an additional set of documents similar to the first set, including consenting to a lien on the home. The total amount Maxwell was to pay on the debt was $17,000. Maxwell subsequently sought a declaratory judgment that the contract was unenforceable on the grounds that it was unconscionable. The trial court granted Fidelity’s motion for summary judgment on the ground that the 1988 contract acted as a novation, barring any action on the 1984 contract, and Maxwell appealed.