BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -If a contract contains a clause which allows you to escape the legal obligation, the promise is said to be illusory. For example, you might have a clause stating that you will “paint the house – if you have time.” This does not increase your legal obligation because you may never have time to paint the house.

Detailed explanation-2: -A promise that is unenforceable due to indefiniteness or lack of mutuality, where only one side is bound to perform.

Detailed explanation-3: -An escape clause is a contractual provision that absolves one party to the contract of performance under specific conditions. An escape clause relieves one party of liability for nonperformance if certain conditions are met. Insurance policies frequently contain escape clauses.

Detailed explanation-4: -Promises are Illusory if Too Indefinite For example, imagine if Patty says, “If you paint my fence I might pay you $100” or David says, “If you pay me $100, I’ll paint the fence if I feel like it.” Both of these promises are indefinite because it appears that Patty or David are not really promising anything.

Detailed explanation-5: -An illusory promise is a promise that is enforceable without consideration. A contract that one party retains the exclusive right to cancel at any time is unenforceable. If a debt is liquidated, an accord and satisfaction cannot take place. An accord and satisfaction is used to discharge an unliquidated debt.