Introduction to Business Law
Essay Preview: Introduction to Business Law
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The Concept of illusory promise could be found in the order the assurance given by a person or entity to another person or entity to do an action or activity which is unclear or unspecific or impossible to execute. An illusory promise is one that does not bind the promisor to do anything. An illusory promise cannot serve as consideration. Because there is no consideration, there is no contract and neither party can enforce the deal. (Beatty&Samuelson, 2010, p.142). Brodsky&Culbertson is a real example of illusory promise which could be done as an optional contract under common law in order to perform the necessary test on the land on a timely basis, and legal obligations on payments on the deal.
The necessity of the test on the land in a timely basis is the argument for Brodsky case. It says “the purpose of the earnest money deposit was to get Mr. Brodsky to perform the necessary tests on the land on a timely basis, so he could decide whether he wanted to buy it, and he did perform those tests, therefore you should enforce Mr. Culbertsons promise to hold the offer to sell open for 60 days.” (Beatty&Samuelson, 2010, p.142). The argument contains a false premise. The purpose of an earnest money deposit is to make the probability that Mr. Brodsky will be inconvenienced by his promise greater than zero percent. In this way this deal was structured, there was no way Mr. Brodsky could be inconvenienced. His “earnest money deposit” was a cleverly-disguised illusory promise.
The legal obligations on payments on the deal is an another option for the contract besides illusory promise on the case. The idea that, if a person promises to hold an offer open for a specified period of time, such as 60 days, they have a moral obligation to keep that promise, therefore they must have a legal obligation to do so also. What Mr. Brodsky should have done if he wanted to bind Mr. Culbertson into holding his offer to sell open for 60 days is paid him a non-refundable fee of say $200, or $350. Whatever Mr. Culbertson required that was reasonable. By making this fee non-refundable but small, Mr. Brodsky would have created what is called an option contract. In this case, the common law is more applicable than Uniform Commercial Code for some reasons like: the common law governs contracts for services, employment, and real estate while the Uniform Commercial Code (UCC) governs contracts for the sale of goods. (Beatty&Samuelson, 2010, p. 143). Option contracts are frequently employed in real estate, professional sports, and in the stock market. Contract – a promise that the law will enforce.
In sum, Culbertson&Brodsky case is a real example, and explanation of necessity of the contract to make business matters more predictable besides illusory promise which could been seen as “an imagination in the desert”. Draft of the contract is an additional option to prevent illusory promises. A signed