Implied-in-law "good Faith" Terms
Many contracts include "satisfaction clauses", in which a promisor can refuse to pay if he isn't subjectively satisfied with the promisee's performance. Strictly speaking, this is an illusory promise, since the promisor has no actual legal burden to pay if he chooses not to. However, courts will generally imply in law that the promisor must act in good faith and reject the deal only if he is genuinely dissatisfied. As another example, if a contract promises a promisee a certain percentage of the proceeds of a promisor's business activities, this is illusory, since the promisor doesn't have to do anything: any percentage of zero is zero. However, courts may find that the promisor made an implied promise to use reasonable efforts to try to make money, and cite him for breach of contract if he does absolutely nothing. The U.C.C. in contracts exclusive to both sides requires "best efforts" in such contracts. This is either read to be the same as a good faith effort, but is seen by some courts as a higher duty.
Read more about this topic: Illusory Promise
Famous quotes containing the words faith and/or terms:
“Again and again, faith in a possible satisfaction of the human race breaks through at the very moments of most zealous discord because humankind will never be able to live and work without this consoling delusion of its ascent into morality, without this dream of final and ultimate accord.”
—Stefan Zweig (18811942)
“The mystic purchases a moment of exhilaration with a lifetime of confusion; and the confusion is infectious and destructive. It is confusing and destructive to try and explain anything in terms of anything else, poetry in terms of psychology.”
—Basil Bunting (1900–1985)