Escape Clause
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contract that allows a party to that contract to avoid having to perform the contract.
If an agreement was drawn up for the sale of a house, for example, the purchaser could include in the contract: "Subject to a builder's inspection to purchaser's full satisfaction". This clause effectively allows the purchaser to "escape" from the contract simply by contracting a builder who will inevitably find some fault, however minor, in the property.
Another example is the clause: "Subject to 30-day due diligence", which effectively gives the purchaser a 30-day buffer.
Escape clauses that require a purchaser or an expert representing the purchaser to be satisfied with the goods or services being purchased have been attacked in lawsuits as invalid for lack of consideration. The argument is that a party can always escape such a contract by merely claiming to be unsatisfied. Therefore, there is no real requirement for that party to perform their obligations under the contract (to pay for the goods or services), and an agreement that only requires performance by one party is an illusory promise, void as a contract. Instead, such an agreement constitutes a gift from the performing party to the non-performing party.
Courts have generally held, however, that an escape clause containing a requirement of satisfaction nevertheless creates an enforceable contract, because a court could determine whether a claimed lack of satisfaction was entirely unreasonable, and therefore likely feigned to avoid the contract.
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