Also known as: alternative performances · alternative obligation
Written by attorneys · grounded in primary & secondary sources — see below
A contractual commitment by which the promisor reserves the right to select among multiple specified performances. The commitment supplies consideration only if each alternative would qualify independently or if one qualifies and a substantial possibility exists that events will remove the nonqualifying alternatives before selection occurs.
Nimbus Apps signed a services agreement with CloudAxis under which CloudAxis could migrate data, provide security monitoring, or waive a setup fee. Nimbus later demanded performance of the migration. Because each listed alternative would have supplied consideration if promised alone, the agreement bound CloudAxis and the claim proceeded.
Atlas Logistics promised MetroBus it would either book daily charters, schedule seasonal routes, or hold a right of first refusal on overflow needs. MetroBus refused to reserve buses, arguing the promise was illusory. Because the right-of-first-refusal alternative imposed no legal detriment, Atlas's promise supplied no consideration.
Select any source to read its text and confirm it supports the definition.
Harbor Builders promised Rivera Electric either a $200,000 cash payment or a right of first bid on future projects. Rivera completed the work and demanded payment. The cash alternative supplied consideration and market conditions created a substantial possibility that the bidding-rights option would disappear, rendering the promise enforceable.
The promise supplies consideration if each alternative would qualify independently or if one qualifies and a substantial possibility exists that events will remove the nonqualifying alternatives before selection.
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An alternative is illusory when it imposes no legal detriment, such as a bare right of first refusal or wholly undefined marketing support that the promisor can satisfy by doing nothing of substance.
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Subsection (a) requires every alternative to qualify independently. Subsection (b) permits enforcement when only one alternative qualifies, provided a substantial possibility exists that events will eliminate the nonqualifying alternatives before the promisor chooses.
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Yes. Consistent past performance and negotiation statements showing the parties expected meaningful performance can establish the substantial possibility that events will cause the nonqualifying option to drop out.
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