Illusory Promises Sample Clauses
The "Illusory Promises" clause defines and addresses situations where a party's promise in a contract is not actually binding because it leaves performance entirely at their discretion. In practice, this clause clarifies that if one party can choose whether or not to perform an obligation without any real commitment, their promise is considered illusory and does not create enforceable rights or duties. By identifying and excluding illusory promises, the clause ensures that only genuine, mutual obligations are recognized, thereby preventing disputes over unenforceable or one-sided agreements.
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Illusory Promises. A promise will be illusory if the promisor has an unfettered discretion in relation to the performance of that promise • “promise accompanied by words showing the promisors discretion or option as to if he will carry out that promise.. results that there is no contract” NB illusory promise o Placer Development Ltd v Commonwealth Terms will not be Illusory Where: ✓ A party is given a latitude of choice, which does not amount to complete and unfettered discretion ✓ The discretion relates to the fulfillment of a condition (Conditional Contract) upon which the performance of the contract depends (i.e. there is no discretion as to the performance of the contract once the condition is satisfied). ✓ Conditional contracts are perfectly valid, just because the condition is discretionary does not make the contract void ▇ ▇▇▇▇▇▇ v ▇▇▇▇▇ – argued the contract was void for want of certainty re satisfactory financing, HELD no not illusory ✓ A term will not be illusory where the discretion is to be exercised by a third party o Godecke v ▇▇▇▇▇▇