Settlement of Claims:
In the case of S horeline Towers Condominium Owners Assoc. v Zurich American Ins. Co. , 196 F.Supp.2d 1210 (S.D.Ala. 2002) the court determined that RDI was an agent acting on behalf of Shoraline and that Shoraline benefited from that authorized representation and that summary judgment was granted to Zurech.
Shoraline had a management agreement with RDI to act as agent on behalf of Shoraline with the authority to adjust all claims arising under any insurance policies, to deliver releases upon payment of claims, to receive on behalf of Shoraline any insurance proceeds and to exercise all rights of the insured. After receiving payments from Zurech, RDI executed a Release of All Claims on behalf of Shoraline.
1. RDI was an authorized agent acting on behalf of Shoraline.
2. Pursuant to the management agreement, RDI had actual authority to sign the Release on behalf of Shoraline.
3. The Release signed by RDI was binding on Shoraline.
4. The Release was clear and unambiguous.
5. The Release releases Zurech from all the claims and causes of actions asserted by Shoraline in this action.
6. An accord and satisfaction occurred between Zurech and Shoraline.
Therefore, the decision to support a summary judgment on behalf of Zurech should be upheld based on the aforementioned.
Promissory Estoppel : A promise is said to legally binding if binding in cases where both the parties reasonably and substantially relied on the promise.
Promissory Estoppel theory says that a promise in binding only if it contains,
1. A clear and definite promise
2. A reliance on the promisor for consideration
Illusory Promises : A promise can't be hold legally binding if it is made without consideration and involves uncertainty of promise.
A contract is a legally enforceable document or promise. A legally enforceable contract holds seven key characteristics as mentioned below:
7. Writing or oral
The current case is a case of illusory promises as promise made by G is made without consideration and the promise fails to bind the person G.
The absence of consideration is due to the fact that person G is not getting anything in exchange of the promise.
Problems with consideration may arise due to uncertainty of performance. The characteristics of uncertain performance are requirements and output contracts.
Hence, the law involve in this case is of " illusory promises " and the " requirement of consideration " to make a contract valid.
Promissory Estoppel Consideration:
• In the 1861 Group , LLC v. Wild Oats Markets , Inc., 728 F.Supp.2d. 1052, 1059 (E.D.Mo. 2010), if the amount of damages claimed by the plaintiff had been reduced to $5,000 instead of the alleged $1,350,000 the outcome would have been the same because the elements for promissory estoppel are still present. The reduced damages amount only impacts the amount of the award that could be granted.
• The defendant made a clear and definite promise that the plaintiff justifiably relied to their detriment and justice could only be served by enforcing the promise to the extent of the damages incurred. If the defendant would incur costs in excess of the $5,000 in damages to keep the promise, then promissory estoppel would not apply.
• The plaintiff would still be entitled to an award of damages; however the promise would not be enforced to the detriment of the defendant if it gives the defendant an undue burden.
• The court would decide an amount that would constitute and undue burden. If it cost the defendant more than twice the damages alleged by the plaintiff, then it is likely that the court will not enforce the promise.