Legal Definitions - aleatory promise

An aleatory promise is a type of promise where one or both parties' obligation to perform, or the extent of that performance, is contingent upon the occurrence or non-occurrence of an uncertain future event. This event is typically outside the direct control of the parties involved. The inherent uncertainty of the event is a fundamental characteristic of such a promise.

• Example 1: Life Insurance Policy

  A person purchases a life insurance policy, agreeing to pay monthly premiums to the insurance company. In return, the insurance company promises to pay a specified sum of money to the policyholder's beneficiaries upon the policyholder's death.

  This illustrates an aleatory promise because the insurance company's obligation to pay the large sum of money is entirely dependent on the uncertain future event of the policyholder's death. While death is certain eventually, the timing is unknown and outside the control of either party. The policyholder pays small, certain premiums for the chance of a much larger, uncertain payout.

• Example 2: Prize in a Random Drawing

  A local charity holds a raffle, promising a new car to the individual whose ticket number is randomly drawn from all entries.

  This is an aleatory promise because the charity's obligation to give away the car is contingent on the uncertain event of a specific ticket being drawn. Only one person will receive the car, and the outcome is determined by chance, making the promise to deliver the car conditional on an uncertain event.

• Example 3: Contingent Business Bonus

  A technology company promises its research and development team a collective bonus of $1 million if their newly developed software patent is approved by the patent office within the next year.

  This demonstrates an aleatory promise because the company's obligation to pay the $1 million bonus is entirely dependent on the uncertain future event of the patent's approval. While the team's efforts contribute, the final decision rests with an external, independent authority (the patent office), making the outcome uncertain and outside the company's direct control. If the patent is not approved, the bonus is not paid.