Legal Definitions - divisible promises

Divisible promises refer to commitments within a contract that can be logically separated into distinct, independent parts. In a contract involving divisible promises, the performance of one part can be completed and paid for independently of the other parts. This means that if one part of the promise is fulfilled, the party performing it may be entitled to payment for that specific part, even if other parts of the overall agreement are not yet completed or are breached. The key characteristic is that each segment of the promise stands on its own as a complete obligation, with its own corresponding performance and consideration.

Here are some examples to illustrate this concept:

• Home Renovation Project: Imagine a homeowner hires a contractor to renovate their kitchen, build a new deck, and paint the entire interior of their house. The contract specifies separate prices and completion timelines for each distinct project: $30,000 for the kitchen, $15,000 for the deck, and $10,000 for the painting. If the contractor successfully completes the kitchen renovation and the deck construction, but then a dispute arises, preventing them from starting the painting, the homeowner would still be obligated to pay for the completed kitchen and deck work. This is because the promises for each renovation component were divisible, allowing for separate performance and payment.

• Software Development Agreement: A startup company contracts with a software development firm to create a new mobile application. The agreement outlines three distinct modules: Module A for user authentication, Module B for product catalog display, and Module C for secure payment processing. Each module has its own set of deliverables, testing phase, and a specific payment milestone upon successful completion. If the development firm completes and delivers Module A and Module B to the startup's satisfaction, they would be entitled to payment for those two modules, even if the project later encounters funding issues and Module C is never developed. The promises for each module were divisible, allowing for partial performance and payment.

• Consulting Services Contract: A small business engages a marketing consultant for a six-month period. The contract specifies three distinct service packages: a social media strategy development in months 1-2, a website content overhaul in months 3-4, and an email marketing campaign setup in months 5-6. Each package has a separate fee associated with its completion. If the consultant successfully delivers the social media strategy and the website content overhaul, but the client then decides to terminate the contract before the email marketing campaign begins, the consultant is still entitled to receive payment for the two completed service packages. The agreement was structured with divisible promises, allowing for independent completion and compensation for each service.