Legal Definitions - illusory promise

An illusory promise is a statement that appears to be a commitment or agreement but is actually so vague, uncertain, or conditional that it does not legally obligate the person making the promise (the promisor) to do anything specific. Because it lacks a genuine, definite commitment, an illusory promise cannot form a binding contract and is therefore unenforceable in court. It creates no real obligation because one party retains complete discretion over whether or not to perform.

Here are some examples to illustrate this concept:

• Employment Bonus: Imagine a company tells its employees, "We promise to pay you a significant bonus at the end of the year if we feel business has been exceptionally good."

  Explanation: This statement sounds like a promise, but it is illusory. The condition "if we feel business has been exceptionally good" leaves the decision entirely up to the company's subjective judgment and discretion. The company is not truly obligated to pay a bonus because they can always claim they didn't "feel" business was good enough, even if profits were high. There is no objective standard or binding commitment.

• Supply Agreement: A bakery owner tells a flour supplier, "I agree to buy all the flour I might need from you next month."

  Explanation: This is an illusory promise because the bakery owner has not committed to buying any specific quantity of flour, or even any flour at all. The phrase "all the flour I might need" allows the owner to decide they need no flour, or to purchase it from another supplier, without breaching any agreement. Since the bakery owner's obligation is entirely optional and undefined, the supplier's corresponding promise to sell is not truly binding either.

• Service Contract: A homeowner tells a landscaper, "I promise to hire you to redesign my garden if I decide to go ahead with the project next spring."

  Explanation: While the landscaper might hope for the work, the homeowner's statement is an illusory promise. The condition "if I decide to go ahead with the project" means the homeowner retains complete control over whether the project will happen at all. If the homeowner later chooses not to redesign the garden, or to hire a different landscaper, they have not broken any enforceable promise because their initial statement created no actual obligation to proceed with the project or to hire this specific landscaper.