Contracts and Sales Multistate Bar Practice Exam

What characterizes a promise as being illusory in a contract?

1. The promise is vague and lacks a definitive scope

2. There is no commitment or legal detriment involved

3. The promise is contingent on another person's actions

4. The promise is made without consideration

The correct answer is: There is no commitment or legal detriment involved

A promise is characterized as illusory when there is no true commitment or legal detriment involved, meaning that the promise lacks the necessary element of enforceability in a contract. For a promise to be legally binding, it must involve a certain degree of obligation or consideration, which entails that one party must either incur a loss or confer a benefit upon another. When a promise is illusory, it gives the impression of a commitment without actually obligating the promisor to act in any way that incurs a legal liability. This often occurs when the promise allows the promisor to unilaterally decide whether to perform or not, leading to a situation where no actionable promise exists. Because the promised action is too uncertain or the promisor can avoid performance without consequence, such a promise cannot support a legally enforceable contract. Considering the other options, vague promises without definitive scope could potentially be enforceable if they meet the requirements of the contract. Promises contingent on another person's actions may still carry binding implications depending on the nature of those contingencies. Promises made without consideration may also lead to unenforceable agreements, but an illusory promise specifically highlights the lack of real commitment rather than merely the absence of consideration. Thus, the defining characteristic is