Lucy is a fashion designer who agrees to give Wood exclusive rights to her brand. In return, Wood must market his product and brand. If you give up exclusive rights, you won`t be able to sell your brand and keep your profits to yourself (that`s exactly what Lucy does). In exchange for marketing Wood, Lucy was promised 1/2 profit. But there is a violation: Lucy sells her belongings on the side and receives a profit, which is retained by Wood. Wood (rightly) lawyers. Binding contract? Answer: Yes; Lucy`s lawyer tries to argue that the contract was illusory due to the lack of reciprocity, as Wood simply could not market his business and could not stop his end. The courts do not buy it because of the UCC clause cited above. There is an implication that Wood will terminate his part of the deal, and because that involvement exists, there is reciprocity and the contract is not illusory. Sorry, Lucy. De Los Santos v Great Western Sugar Company The plaintiff agrees to transfer beets to the defendant. The defendant agrees to pay the plaintiff one transfer per unit (I pay you for each beet transfer). Key wording of the contract: “The quantities of beet that can be loaded by the company.” In the middle of the contract, the defendant informs the plaintiff that it is no longer needed for his services.
The plaintiff is angry because he thought he would transfer beets for the duration of the contract (the plaintiff eventually accepted the job to make money!). Binding contract? Since an illusory promise forms a contract in which only one party is bound to perform, an illusory promise is not a valid consideration and no party to a contract containing an illusory promise is bound by the contract. The illusory promisor is not bound because he has not made a commitment (nothing he has promised really limits his future options). The true promise is not bound because he has received an illusory promise in exchange for his real promise and because an illusory promise is not a quid pro quo, no enforceable contract has been forged. The general rule is that if one party makes an illusory promise in exchange for another person`s real promise, neither party is bound. What does counterparty mean in contract law? A contract is a legally binding document that applies the terms of an agreement for an exchange of goods or services between two or more parties. For a contract between the parties to be valid, it must be taken into account. Consideration must be given and understood for all contracting parties. Consideration is the concept of what each party receives from an agreement made in a contract.
Illusory promises: An agreement in which one party makes a promise in return that does not actually bind them to anything under the contract. The “Terms” of certain websites and software applications may be considered an illusory and unenforceable contract if the language can be changed by the Company at any time without notifying users and giving them the opportunity to accept the new changes.   Proper consideration in contract law means that the value to be exchanged is agreed and reasonable. The terms and value of the agreement must be clear and understood by all parties involved. If only one party is obliged to perform and nothing of value is promised in return, the contract is illusory. Contracts are forms of contracts that must also have some degree of consideration to be valid. The Hague Treaty of 1726, although important in history, is considered not included in the treaty because it is obsolete. To understand reciprocity (and consideration), we must first understand the difference between unilateral and bilateral treaties (yes, our book doesn`t mention any of that, but be patient with me). Equitable remedies are remedies ordered by the court in the name of fairness. As a general rule, before awarding equitable remedies, the court will consider whether there is equity and equivalence of substantial value in the arrangement before awarding equitable relief.
For example, if two parties work together to design and develop a product, the court may order specific performance and order one party to deliver the item to the other party. If the terms of the promise are at the discretion or control of the person making the promise, then nothing is absolutely promised and it is therefore illusory. Another example would be if the council promises to buy as many goods as it wants to order from a local business. It is not a binding contract. This is illusory. One of the elements of a contract is the consideration or benefit that both parties receive for their actions. The consideration may be in exchange for a promise of performance or a promise of non-performance. A value proposition may simply be the exchange of goods for money, such as when Bill Joes bought scooters. A promise not to act occurred when Joe promised not to sue in exchange for paying for the mailbox Bill had mowed down while riding the scooter. If some contracts contain a clause exempting a party from its obligation to pay if it is not satisfied with the goods or services provided, an illusory contract is created.