Legal Definitions - naked contract

A naked contract, also known by its Latin term nudum pactum, refers to an agreement or promise that lacks legal enforceability because it is not supported by "consideration." In simple terms, for a contract to be legally binding, each party must exchange something of value. This "something of value" is called consideration. Without this mutual exchange, the agreement is generally considered a mere gratuitous promise and cannot be enforced in a court of law.

Here are some examples to illustrate this concept:

• Example 1: A Generous Promise

  Imagine a wealthy aunt tells her niece, "Because I love you, I promise to give you $5,000 next month." The niece is thrilled and plans how to spend the money. However, the next month, the aunt changes her mind and decides not to give the money.

  Explanation: This is a naked contract because the niece did not offer anything of value in return for her aunt's promise. The aunt's promise was purely a gift, a one-sided declaration of intent. Since there was no consideration from the niece (no exchange of value), the aunt's promise is generally not legally enforceable as a contract, and the niece cannot sue her to get the money.

• Example 2: Promise to Perform an Existing Duty

  A homeowner hires a landscaping company to completely redesign their garden for a set price, with a clear deadline. A week before the deadline, the company owner tells the homeowner, "If you promise to pay us an extra $1,000, we guarantee we'll finish on time." The homeowner, eager to have the garden ready, agrees.

  Explanation: The landscaping company was already legally obligated by the original contract to finish the garden redesign on time. Their promise to "guarantee" finishing on time in exchange for an extra $1,000 does not offer any *new* consideration. They are merely promising to do what they were already contractually bound to do. Therefore, the homeowner's promise to pay the additional $1,000 might be considered a naked contract and unenforceable, as the company provided no new value in exchange for it.

• Example 3: A Friend's Offer of Help

  Mark tells his friend Lisa, "I'll help you paint your entire living room next Saturday, free of charge." Lisa, relying on Mark's promise, cancels her plans to hire a professional painter. On Saturday, Mark calls to say he's too busy and won't be able to help.

  Explanation: Mark's promise to help Lisa paint was a gratuitous offer. Lisa did not provide any consideration (anything of value) in exchange for Mark's promise. While Lisa might be inconvenienced or disappointed, Mark's promise is a naked contract and generally not legally enforceable. She cannot sue him for breach of contract because no binding contract was formed due to the lack of mutual consideration.