Christopher "Chris" Thorne (Chevy Chase) is an investment banker with his own newsletter. At a party, he meets financial lawyer Diane Lightson (Demi Moore) who he offers to drive to Atlantic City for an important meeting. Tagging along are two of Chris' wealthiest clients, eccentric Brazillian siblings Fausto & Renalda. At their insistence, Chris takes the "scenic" route through the country. While passing through the remote village of Valkenvania, Chris fails to make a complete stop at a stopsign, which draws the attention of local deputy Dennis Valkenheiser (John Candy). Goaded by Fausto, instead of pulling over Chris attempts to show off his BMW for Diane by attempting to evade Dennis. However, Dennis' cruiser is heavily modified, and along with his cousin Purdah (a fellow Deputy) is easily able to corner the group with the aide of some rather bizarre traps. They are hauled off to a decrepit mansion/scrap yard where they are brought before the local Justice of the Peace, the 106-year-old Shire Reevenote Alvin Valkenheiser (Dan Aykroyd). As it turns out, the JP's policy is to punish all offenders to the fullest extent of the law, and holds an exceptional grudge against all "bankers". However, Diane is able to sweet-talk the Judge, who decides to suspend sentencing.
Later that evening, Dennis pulls over another car, this one full of drunken, drug-using yuppies (led by Daniel Baldwin!). Unlike the previous group, they are less than gracious to their host, who immediately sentences them to death. In this case, the death penalty is a roller coaster ride that deposits its victims in a giant contraption called "Mister Bonestripper
", which leaves criminals Stripped to the Bone.
Over dinner, the Judge explains how back in 1917 when he was shipped off to fight World War I, a New York "fee-nan-cier" conned his grandfather into mining the whole place out in exchange for shares in the United Coke Company. In his own words, the stock certificates are worth as much today as the "finest outhouse wallpaper you've ever seen". The town was left a "burned-out coal field" and "the biggest icebox graveyard east of the Ohio foundry belt" with a still-burning mine fire that started in 1926. For this, he vows to always throw the book at a "banker" (which appears to be an umbrella term for anyone that has more money than he does). We are also introduced to his other granddaughter, Dennis' sister Eldona (Candy in drag). When it becomes apparent that the Judge has no intention of letting them go, the group attempts to escape. Fausto & Renalda leap out the window and attempt to make a run for it, while Chris & Diane are quickly captured by Eldona. Fausto & Renalda make it to a moat full of filthy water than they have no choice but to cross. They are successful, but unfortunately Dennis is waiting for them on the other side. Throughout the night, it has become apparent that Dennis doesn't approve of his grandfather's policies, and decides to help them escape. Before leaving, he unlocks the room that Chris & Dianne are being held in, leaving them to escape on their own. Exploring the house, they discover evidence of other victims of the Judge's style of justice, spanning the past century. When they are unintentionally split up, Chris is recaptured by Eldona, who has taken a fancy to him. The Judge tells Chris that if he's willing to marry Eldona, he'll grant him a pardon.
Later that night, Purdah brings in a fresh batch of speeders — the hip-hop group Digital Underground. After giving an improptu performance, the Judge decides that, due to their contributions to society through the performing arts, all charges against them are dropped. He asks them to perform the wedding hymm, but Chris makes another attempt to escape. With Eldona heartbroken, the Judge sentences Chris to "Mister Bonestripper." However, the machine breaks just as he is about to be fed into it, allowing him to make a run for it. Holding Diane prisoner, the Judge threatens to have her quartered using a machine that has multiple bulldozer blades. But if Chris is willing to take her place, she will be free to go. Chris uses an old oil barrel to cause a diversion, allowing him to rescue Diane and escape on a train.
When they finally make it to Atlantic City, they tell the State Police everything, who (incredibly) believe them, and ask them to take them to Valkenvania. However, as it turns out, the Police are well aware of the Judge's activities, approving of the way he gets the job done and setting up criminals they want to get rid of for his "justice". But just before Chris & Diane are silenced, one of the many abandoned mine shafts beneath the mansion gives way, destroying the village. In the epilogue, Dennis is now living in Brazil, as Fausto's chief of security, and Renalda's lover. Chris & Dianne return to Manhattan, but a news report on the disaster reveals that intense heat from the mine fire has produced millions of barrels of crude oil, that the JP has survived the explosion, and he still has Chris' driver's license. With his home destroyed, surely his "grandson-in-law" won't mind him paying a visit!
