ATTENDANCE BY WEBINAR ONLY

In Evans v Davantage Group Pty Ltd (“Evans”),[1] Beach J considered whether Davantage’s “discretionary risk product”, a motor vehicle warranty, constituted an illusory promise. It is accepted in Placer Developments Ltd v Commonwealth (“Placer”) that an illusory promise is one where a contractual term constituting a promise is accompanied by words which allow the promisor a discretion to carry out that promise.  But many contracts do allow a party a level of discretion when to carry out a contractual obligation.  In Evans v Davantage, Beach J considered a clause which allowed Davantage “unfettered discretion” whether to comply with its contractual obligations, with Davantage only being required to consider a claimant’s claim “fairly and justly”.  In doing so, Beach J explored the limits of contractual discretion and ultimately concluded that Davantage’s contract was illusory.  This article considers the judgment of Beach J in Evans, the concept of illusory promises and examines the distinction between a discretion to perform a promise and an option as to its manner of performance.