A promise conditioned upon an event within the promisor's control is not illusory if the promisor also impliedly promises to make reasonable effort to bring the event about or to use good faith and honest judgment in determining whether or not it has in fact occurred. The implied promise is enforceable by the promisee, and it constitutes a legal detriment to the promisor; therefore it furnishes sufficient consideration to support a return promise.
The buyers and the sellers executed a contract for the purchase of land. The buyers were unable to obtain a loan through the bank specified in the contract, but tendered the required down payment. The sellers refused to complete the sale and the buyers bought action. The trial court found a valid contract of sale and found that the sellers breached the contract entitling the buyers to specific performance and damages.
Did the sellers breach the contract by refusing to complete the sale because of the buyer’s inability to obtain a loan?
The court found that although the attachment describing the property was not physically attached to the contract, it was delivered with the execution of the contract and complied with the statute of frauds. The court found consideration because the contract included an implied promise by the buyers to use reasonable effort to procure a loan and to exercise good faith in deciding whether the terms of the loan were satisfactory. As to timely performance, the sellers did not furnish to the buyers an inventory of personalty and a list of outstanding leases in accordance with the terms of the contract and prevented the buyers from earlier compliance.