Legal Definitions - alternative promise

An alternative promise is a type of contractual commitment where the person making the promise (the promisor) has the option to fulfill their obligation by performing one of two or more distinct actions specified in the agreement. The choice of which action to perform typically rests with the promisor, unless the contract explicitly states otherwise. Once the promisor selects one of the alternatives, they are then bound to perform that chosen action.

• Example 1: Business Supply Contract

  A custom furniture manufacturer promises a client that they will either deliver 50 bespoke dining chairs by October 1st OR, if they encounter unforeseen production delays, provide a 15% discount on the entire order and deliver by October 15th. The manufacturer retains the right to choose which option to pursue based on their production schedule.

  Explanation: This is an alternative promise because the manufacturer (the promisor) has the choice between two distinct ways to fulfill their contractual obligation: delivering on time without a discount, or delivering later with a discount. The promise is satisfied by performing either of these specified alternatives.

• Example 2: Service Agreement

  A software development company agrees to create a new mobile application for a startup. Their contract includes an alternative promise regarding the final payment structure: the startup will either pay the remaining $50,000 balance in cash upon completion OR grant the software company a 2% equity stake in the startup, whichever the startup's board decides is more financially advantageous at the time of launch.

  Explanation: In this scenario, the startup (the promisor regarding the final payment) has an alternative promise because it can choose to satisfy its payment obligation by performing one of two specified actions: a monetary payment or the transfer of an equity stake. The promise is fulfilled once one of these options is chosen and executed.

• Example 3: Real Estate Transaction

  A property owner, selling a piece of land, makes an alternative promise to the buyer regarding access to the property. They promise that they will either grant a permanent easement across their adjacent parcel for road access OR construct a new gravel driveway connecting the purchased land directly to the main public road, allowing the seller to decide which option is more feasible based on their construction resources.

  Explanation: The property owner (the promisor) has made an alternative promise because they have committed to providing access to the land in one of two specified ways: granting an easement or building a driveway. The owner has the choice to perform either action to satisfy their promise.