Culbertson V Brodsky Case Summary
Illusory Promise | You be the Judge
Case Study
An illusory promise sounds like a promise or commitment, but is not really a promise or commitment to do anything. Because it does not bind the maker to do anything, it may not be treated as consideration to establish a contract.
Culbertson v. Brodsky Culbertson had listed real estate for sale. Brodsky & Culbertson signed an option contract. Option document: - Brodsky delivers $5,000 check to bank; - Bank holds check for sixty (60) days without cashing it; - During the 60 days Brodsky could inspect the property; - After inspection Brodsky could decide whether to purchase or not; - Brodsky decided to buy, Culbertson refused claiming there was no contract because no consideration was given; …show more content…
- Trial for Brodsky, Culberttson appeals.
In order to be establish a contract, consideration must be of legal value and bargained for or exchanged, or a promise (Beatty). Brodsky did not give valid consideration that makes Culbertson’s offer to sell enforceable.
Brodsky’s claim that Culbertson received earnest money is false. Culbertson (or his bank on his behalf) received a piece of paper that might or might not become a cashable check if Brodsky decided.
To argue that the check, which could not be cashed for 60 days, was valuable consideration it must be shown that it has some other value besides the potential cash value during the 60 days. If on day 61, Culbertson had cashed the check, it could have been valuable consideration that may have established a contract if the contract had not otherwise expired.
To establish “value” (Gifis)
- promisee does or commits to doing something he had no prior legal duty to do - or refrains from doing something he was legally entitled to
do - or must be a legal benefit to promisee, or a legal detriment to the promisor
The check (at least for 60 days) is not valuable consideration and does not establish a contract.
Was other consideration given?
Brodsky does not make the claim of any other consideration.
The inspection and engineering studies that Brodsky conducted were not of legal benefit to Culbertson. They possibly were of detriment to Brodsky in that Brodsky incurred expense or labor for these assessments, which he would may not have incurred without what he perceived as an option contract to buy.
However, because the intended contract was for the potential sale of real estate, it must be in writing to be enforceable. The option document makes no mention of other consideration, such as Brodsky incurring expense to assess the property. And because the check was just a piece of paper for the sixty days, there was no consideration.
Without consideration, there was no contract. Trial court erred – appellate court reverses and Culbertson prevails.
The Uniform Commercial Code is a federal document that is an attempt to formalize or standardize rules and regulations governing commerce among states. It is not, in itself, the law. Rather it is a recommended source of language and standards for the states to adopt.
Common law is the aggregation of all court decisions from relevant cases, preferably from an appellate court decision and standardized by subsequent case law. I cannot source a UCC definition of “valuable consideration” but it appears that the UCC uses the common law definition of consideration. It is the common law definitions of consideration and illusory promise that are most relevant to in Brodsky.
Beatty, J., & Samuelson, S. (2009). Introduction to business law. (3 ed.). Mason, OH: South-Western Cengage Learning
Gifis, S. H. (1998). Dictionary of Legal Terms : A Simplified Guide to the Language of Law. Barron's
Case Study
An illusory promise sounds like a promise or commitment, but is not really a promise or commitment to do anything. Because it does not bind the maker to do anything, it may not be treated as consideration to establish a contract.
Culbertson v. Brodsky Culbertson had listed real estate for sale. Brodsky & Culbertson signed an option contract. Option document: - Brodsky delivers $5,000 check to bank; - Bank holds check for sixty (60) days without cashing it; - During the 60 days Brodsky could inspect the property; - After inspection Brodsky could decide whether to purchase or not; - Brodsky decided to buy, Culbertson refused claiming there was no contract because no consideration was given; …show more content…
- Trial for Brodsky, Culberttson appeals.
In order to be establish a contract, consideration must be of legal value and bargained for or exchanged, or a promise (Beatty). Brodsky did not give valid consideration that makes Culbertson’s offer to sell enforceable.
Brodsky’s claim that Culbertson received earnest money is false. Culbertson (or his bank on his behalf) received a piece of paper that might or might not become a cashable check if Brodsky decided.
To argue that the check, which could not be cashed for 60 days, was valuable consideration it must be shown that it has some other value besides the potential cash value during the 60 days. If on day 61, Culbertson had cashed the check, it could have been valuable consideration that may have established a contract if the contract had not otherwise expired.
To establish “value” (Gifis)
- promisee does or commits to doing something he had no prior legal duty to do - or refrains from doing something he was legally entitled to
do - or must be a legal benefit to promisee, or a legal detriment to the promisor
The check (at least for 60 days) is not valuable consideration and does not establish a contract.
Was other consideration given?
Brodsky does not make the claim of any other consideration.
The inspection and engineering studies that Brodsky conducted were not of legal benefit to Culbertson. They possibly were of detriment to Brodsky in that Brodsky incurred expense or labor for these assessments, which he would may not have incurred without what he perceived as an option contract to buy.
However, because the intended contract was for the potential sale of real estate, it must be in writing to be enforceable. The option document makes no mention of other consideration, such as Brodsky incurring expense to assess the property. And because the check was just a piece of paper for the sixty days, there was no consideration.
Without consideration, there was no contract. Trial court erred – appellate court reverses and Culbertson prevails.
The Uniform Commercial Code is a federal document that is an attempt to formalize or standardize rules and regulations governing commerce among states. It is not, in itself, the law. Rather it is a recommended source of language and standards for the states to adopt.
Common law is the aggregation of all court decisions from relevant cases, preferably from an appellate court decision and standardized by subsequent case law. I cannot source a UCC definition of “valuable consideration” but it appears that the UCC uses the common law definition of consideration. It is the common law definitions of consideration and illusory promise that are most relevant to in Brodsky.
Beatty, J., & Samuelson, S. (2009). Introduction to business law. (3 ed.). Mason, OH: South-Western Cengage Learning
Gifis, S. H. (1998). Dictionary of Legal Terms : A Simplified Guide to the Language of Law. Barron's