A Promise Is Illusory and Will Not Be Enforced by Courts

question 47

True/False

A promise is illusory and will not be enforced by courts when the offeror is not truly bound by his or her vague promise.

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Definitions:

AFC

Average Fixed Cost, which is the fixed costs of production spread out over the number of units produced, declining as production increases.

Average Total Cost

The total costs of production divided by the total output, giving the cost per unit of output calculated by adding fixed and variable costs and dividing by the number of units produced.

Fixed Cost

Costs that do not fluctuate with the level of production or sales, such as rent, salaries, and insurance premiums, remaining constant regardless of the output level.

Marginal Cost

The expense incurred from the production of an extra unit of a product or service.