What characterizes an illusory promise in a contract?

An illusory promise in a contract is characterized by the lack of a definitive commitment to purchase or perform a specific act. Such a promise typically appears to be an obligation but does not actually impose a real duty on the promisor, rendering it unenforceable. This occurs when a party's promise is contingent upon their discretion or a vague outcome, allowing them to withdraw without any consequence.

For instance, if someone states they will buy goods only if they feel like it or if they say, “I might buy your car,” that is an illusory promise because it does not create a binding commitment. The promisee cannot rely on that promise for fulfillment, as the promisor has retained the option not to perform.

Understanding the nature of illusory promises is fundamental in contract law because such promises lack the necessary element of consideration, which is required to form enforceable contracts. When a promise lacks this commitment, it does not meet the legal standards to be considered valid. This distinction is crucial in recognizing valid agreements versus those that are merely declarations of intent without the weight of obligation.