C2: Assent-Based Niches of Promise Enforcement: Modification & Waiver Flashcards
How to modify a contract with pre-existing duty?
To modify a contract when you have pre-existing duty, you must take on new consideration to support modification.
*Doing what you are legally bound to do does not constitute consideration
When would a modification of contract be invalid?
When the modification is made through coercion, thus there is no consideration and therefore not valid.
What is mutual rescission?
When a rescission of contract by both parties for the purpose of entering in a new one
When is a new contract under mutual rescission valid?
1) Mutual consent to termination; and
2) Mutual assent to any terms of the new contract
Is the time of rescission of contract important?
No, so long as the contract is executory and the rescission is mutual
Can rescission of contract be presumed?
No, it must be expressed and thus an old contract is not continued with modification but is ended when a new one is made
What is the minority 4-part test rule for modification?
1) parties must voluntarily agree; and
2) promise modifying contract was made while contract is executory (neither party has fully performed) and;
3) Unanticipated circumstances prompted the modification; and
4) Modification is fair and equitable
What is a waiver?
A waiver is an intentional release, relinquishment, or surrender of a known right
*Waiver can be retracted if it is executory
What are the elements for a waiver?
1) a right must exist at the time of the waiver;
2) the party who is accused of waiver must have constructive or actual knowledge of the right in question; and
3) the party intended to relinquish its right
How is a waiver differ from a modification?
A modification requires consideration because there is a pre-existing duty (material).
A waiver requires no consideration because only a condition is changed (immaterial)
