Amendable, Illusory, Contracts
A set of golf club membership contracts provide that they “may be amended from time to time.” Signatories, who plunked down $185,000 refundable deposits to join once the clubs were operational, want to exercise the refund clause. The clubs respond that they can exercise their amendment ability and keep the deposits. Lawsuits result.
This seems clearly wrong. The amendment clause should be interpreted in light of commercial reasonableness, or the contracts are voidable as illusory. If “may be amended from time to time” means that the Club has the sole discretion to change both signatories’ obligations to the detriment of the members, then we’ve got a pretty clear example of a contract in name only. Rather, I imagine that the amendment language, reasonably interpreted in light of commercial norms, is limited to non-material terms -which would not include the refundability of the deposits. Indeed, the members argue that refundability was a “relatively unusual stipulation [that] was a big part of the appeal of joining.”
What do you think?