What is an illusory promise?

A Court will not Enforce a Promise if the Court Determines that the Promise is Illusory

The law of contracts concerns promises that a court will enforce.  For example, if Patty promises to pay $100 and David promises to paint her fence in return for that promise, a court would likely conclude that Patty and David have entered into a contract.  The parties have promised to exchange something in return for the other person’s promise and a court will enforce each party’s promise.  That is, if David paints the fence and Patty refuses to pay, a court will enforce her promise by requiring her to compensate David.

The video below introduces the so-called ‘illusory promise’, which in one type of purported promise that a Court will not enforce.

Promises are Illusory if Too Indefinite

Courts will often determine that a promise is illusory if it is too indefinite and leaves the option of performance up to the promisor.  For example, imagine if Patty says, “If you paint my fence I might pay you $100” or David says, “If you pay me $100, I’ll paint the fence if I feel like it.”  Both of these promises are indefinite because it appears that Patty or David are not really promising anything.  Each of them is saying they might do something, or might not.  They can decide whether or not they perform.

A court would likely conclude that the statement, “I promise to paint your fence if I feel like it” cannot be the basis for a contract because the party making the promise can decide to do nothing.   

Courts Might Try to Avoid an Unfair Result  if One Party Claims its Promise was Illusory

Illusory promises can be unfair.  For example, let’s say a marketer says to a musician, “I’ll promote your new music album if you create the album  and if I think it is possible for me to promote your music.” What happens if the musician keeps his side of the bargain but the marketer refuses to promote the album?  Could the marketer claim that his promise was illusory because he had the discretion to refuse to promote the album?   This result might be unfair to the musician and a court could conclude that the marketer is obligated to use reasonable good faith efforts to promote the album.