ProfessorMelissa A. Hale
CaseCast™ – "What you need to know"
Brief Fact Summary. P sued D for payment on a promissory note endorsed by D.
Synopsis of Rule of Law. A creditor’s promise to forbear the collection of a debt “until such time as I want my money” is illusory and the agreement is not enforceable against either party.
There is no doubt that an agreement by the creditor to forbear the collection of a debt presently due is a good consideration for an absolute or conditional promise of a third person to pay the debt, or for any obligation he may assume in respect thereto.View Full Point of Law
Issue. Did P’s promise to forbear impose a duty upon him?
Held. No. Judgment for D affirmed.
An agreement by a creditor to forbear the collection of a debt presently due is a good consideration for an absolute or conditional promise of a third person to pay the debt. However, in this case, the note did not legally extend the payment of the debt.
P’s promise to forbear collection of a debt payable on demand imposed no duty on P to forbear and was not a consideration for D’s promise to pay if her husband did not. There was no agreement to forbear for a fixed time or a reasonable time, but an agreement for such a time as P should elect. Nothing prevented P from an immediate suit on the note. P’s promise was illusory and either party could enforce the agreement.
Discussion. An illusory promise is a promise in form, but not in substance. An illusory promise is not consideration for the other promise.