Legal Definitions - nudum pactum

A nudum pactum (Latin for "bare agreement") refers to an agreement that lacks the necessary legal elements to be considered a binding contract and is therefore unenforceable in a court of law. While historically rooted in Roman law, in modern contract law, the primary reason an agreement might be deemed a nudum pactum is the absence of "consideration."

Consideration means that each party to an agreement must provide something of value to the other party in exchange for their promise. This mutual exchange of value, whether it's a payment, a service, a promise to do something, or a promise not to do something, is essential for an agreement to become a legally enforceable contract. Without this exchange, the agreement is generally seen as a mere promise or a gift, rather than a legally binding obligation.

• Example 1: A Gratuitous Promise

  Imagine a scenario where a wealthy aunt promises her niece that she will buy her a new car next year, purely out of generosity. The niece does not offer anything in return, nor does she take any action based on this promise. If the aunt later changes her mind and decides not to buy the car, the niece generally cannot sue her aunt to enforce the promise.

  Explanation: This is a nudum pactum because the aunt's promise is a gratuitous one. The niece has not provided any "consideration" – anything of value – to the aunt in exchange for the promise of the car. Without this mutual exchange, there is no legally binding contract, only a kind gesture that the aunt is not legally obligated to fulfill.

• Example 2: Past Consideration

  Suppose a neighbor, out of kindness, helps another neighbor clear a fallen tree from their driveway after a storm, without any prior discussion of payment. A week later, feeling grateful, the second neighbor promises to pay the first neighbor $200 for their help.

  Explanation: The promise to pay $200 in this situation is a nudum pactum. The act of clearing the tree (the "consideration") occurred *before* the promise of payment was made. In contract law, "past consideration" is generally not valid consideration for a new promise. For a contract to be formed, the consideration must be given *in exchange* for the promise at the time the agreement is made. Since the first neighbor didn't provide anything new of value *in exchange* for the promise of $200, the promise is not legally enforceable.

• Example 3: An Illusory Promise

  Consider a company that tells its employees, "We *might* give you a bonus at the end of the year if we feel like it and profits are good."

  Explanation: This statement constitutes a nudum pactum because the company's promise is "illusory." It does not commit the company to any definite action or obligation. The phrase "if we feel like it" means the company retains complete discretion, and there is no real promise for which the employees could provide consideration (e.g., continued work under specific conditions for a guaranteed bonus). Because there is no mutual obligation or definite exchange of value, this "agreement" is unenforceable as a contract.