What You'll Learn

  • Illusory promises
  • Output and requirements contracts
  • Past consideration and gifts
  • Moral obligation and material benefit
  • Promissory restitution

Educational information only; not legal advice. This article is a general study aid and should be checked against current authority and course materials.

1. Illusory Promises: Words Without Commitment

A promise is illusory when the promisor retains unlimited discretion to perform or not perform. “I will buy your car if I feel like it” imposes no meaningful restriction and therefore gives the other party nothing to bargain for.

Key Takeaway

“I will paint Sunday, but if it rains I will paint Monday” offers two genuine performance alternatives. “I will paint Sunday, but I may change my mind” keeps performance optional. The first can bind; the second is illusory.

2. Good Faith Can Supply Mutuality

The outlines identify several agreements that are not illusory because the law constrains discretion:

● Output contract: seller promises to sell all actual output to the buyer. ● Requirements contract: buyer promises to purchase all actual requirements from the seller. ● Exclusive dealing: the law may imply reasonable or best efforts to supply and promote the goods. ● Satisfaction condition: dissatisfaction must be honest and in good faith when subjective taste controls; utility may be judged objectively.

Under UCC §2-306, output and requirements quantities must occur in good faith and may not be unreasonably disproportionate to a stated estimate or comparable prior output or requirements. That constraint creates a real possibility of breach.

Key Takeaway

An exclusive arrangement can carry an implied promise to use reasonable efforts. The implied duty gives the agreement business efficacy and prevents the promise from being illusory.

3. Past Consideration Is Not Bargained For

An act completed before the promise cannot ordinarily have been induced by that promise. “You rescued my property yesterday, so I promise to pay you $5,000” lacks the contemporaneous bargain required for consideration. The same problem applies to a promise to make a gift: generosity is not an exchange.

4. Moral Obligation Usually Does Not Create a Contract

The traditional rule does not enforce a promise merely because keeping it would be honorable. The outlines contrast a fleeting moral obligation with a narrower material-benefit or promissory-restitution theory. The law is cautious because a later promise may be emotional, disproportionate, or unsupported by evidence of a bargain.

Doctrine Core idea Typical effect

Past consideration The act occurred before the promise and was not induced by it. No contractual consideration.

Moral obligation A later promise recognizes an ethical duty alone. Generally unenforceable.

Promissory restitution A later promise recognizes a benefit previously received. May bind to the extent necessary to prevent injustice, subject to limits.

Quasi-contract No promise is enforced; law prevents unjust enrichment. Restitution measured by the benefit unjustly retained.

5. Restatement §86 Limits the Material-Benefit Theory

A promise made in recognition of a benefit previously received may be binding to the extent necessary to prevent injustice. The promise is not binding when the benefit was intended as a gift, when the promisor was not unjustly enriched, or to the extent the promised value is disproportionate to the benefit.

Key Takeaway

Mills v. Wyman reflects the traditional refusal to enforce a father’s later promise based only on moral obligation. Webb v. McGowin is used in the outlines as the stronger material-benefit situation, where a life-saving act and a later promise supported enforcement.

Key Takeaway

A publisher gives an agent exclusive rights to market a designer’s work but says nothing about the agent’s duties. If the agreement and compensation structure imply a duty to use reasonable efforts, the promise is not illusory. If the agent expressly reserves the right to do nothing forever, consideration is much weaker.

Common Mistake

Do not label every conditional promise illusory. Ask whether good faith, best efforts, output, requirements, or another objective constraint limits discretion. Do not confuse promissory restitution with ordinary consideration or with quasi-contract.

Primary Authorities

  • ● U.C.C. § 2-306 (output, requirements, and exclusive dealings).

  • ● Restatement (Second) of Contracts § 86 (promise for benefit received).

  • ● Wood v. Lucy, Lady Duff-Gordon (implied reasonable efforts).

  • ● Mills v. Wyman (moral obligation).

  • ● Webb v. McGowin (material benefit and subsequent promise).

Exam-ready conclusion

A real promise limits legal freedom. When the words appear optional, look for an implied good-faith or best-efforts duty. When the act came first, consideration usually fails, although restitution-based doctrines may prevent injustice.