Modification Of Contracts Flashcards
Common law = ?
Promote the strict meaning of the agreement
UCC = ?
Being chill and promoting the fluidity of commerce
Under Common law what is required for a contract modification?
Consideration
Jonny was supposed to build a house & a gazebo for a landowner for $100. Johnny got way too tired after building the house.. and didn’t really know how to build a gazebo. He was just like “fuck it… I can’t build this gazebo, i’m too lazy”. So the owner of the house agrees to still pay Johnny the $100 and says Johnny doesn’t have to build the gazebo (oral modification. Afterwards as the landowner surveys his land, and how empty it looks without the gazebo he cries and sues Johnny. Johnny says “oh no.. he agreed I didn’t have to build the gazebo I’m going to win this lawsuit.” Who wins?
The owner! there was no consideration for the modification. The gazebo still needs to be built.
What is the pre-exisitng duty rule?
Performing or promising to perform and existing legal duty you already had to do is not consideration because there is no legal detriment.
Goat says he will pay rainbow $100 to paint your roof. Then he doesn’t do it. Then Rainbow says “give me an extra $5.. I promise i’ll paint it this time” is this allowed?
No as there is a pre-existing duty he was already being paid to paint the house.
What are the exceptions to the pre-existing duty rule under the common law?
1) Modifications based on unanticipated circumstances that are fair and equitable in view of those circumstances
You pay goat $100 to walk to the top of a mountain. Goat laughs… because he walks up mountains all the time! so easy. But halfway through walking up the mountain Goat sees a bigass immovable boulder that he has to push to get to the top of the mountain. Goat says “wait a second..$100? for this? I’m going to need $500. This got way harder”. Can Goat ask for the $500 or would it be a violation of the pre-exisiting duty “something for nothing” rule?
Under the modern view so long as the modification is based on unanticipated circumstances and is fair and equitable in view of those circumstances consideration is nit needed to modify the contract. Goat can a for the $500.
A trash collector who has a contract with a cute & cosy town of 50 people called LiLTown. The trash collector is paid $30,000 a year by the LilTown city council to service the WHOlE town with his two trucks. Then a magazine article comes out: Cutest Rustic Enclaves to Live in 2025 naming LilTown as #1. Within one month 4 million people move into LilTown and the trash collector is sitting there with his little ass $30,000 contract. Can he ask for more money?
Yes! Modification of his contract would be fair and equitable in light of these unanticipated circumstances of the population increase.
Mnemonic for modification of a pre-exisiting duty. Fireworks, Explode, Above?
Fair, Equitable (not) Anticipated
Is promising to ratify a voidable contract sufficient for new consideration?
Yes!
Johnny goes into the Lexus dealership when he’s just a kid. He signs up for that new 2025 GX because its looking clean. He is making his payments on time boss baby style. Until he turns 17 and realises one thing: He made that contract when he was 6. Its voidable. He can get out of it. Johnny wants a lower contract price can he do this?
If Johnny promises to ratify the contract once he turns 18 the Lexus Dealership may agree to give him a way lower payment. This isn’t “something for nothing” because they are getting the assurance he will stay with the contract and not void it (which he has the legal right to do), and he is getting a lower price in exchange.
A landowner and a contractor entered into a written contract under which the contractor agreed to build a building and
pave an adjacent sidewalk for the landowner for $200,000. Later, while construction was proceeding, the landowner
and the contractor entered into an oral modification under which the contractor was not obligated to pave the sidewalk
but still would be entitled to $200,000 upon completion of the building. The contractor completed the building. The
landowner, after discussions with his landscaper, demanded that the contractor pave the adjacent sidewalk. The contractor refused.
Has the contractor breached the contract?
Yes, because there was no consideration for the discharge of the contractor’s duty to pave the sidewalk.
The oral modification that removed the contractor’s duty to pave the sidewalk will not be enforced
because it was not supported by new consideration, nor did it fall under an exception that allows modification without
new consideration. The contractor is bound to the original agreement and by refusing to pave the sidewalk, he is in
breach.
Can a party discharge a party’s contractual duty orally (rather than written) in many
circumstances?
Yes as long as consideration is given it does not need to be in writing.
Oral modifications made in good faith and therefore enforceable only in?
UCC contracts
A written contract may be modified by an oral agreement but what else must happen?
The modification must be in writing if the contract, as modified, falls within the Statute of Frauds.
When examining oral modifications of a written contract is parole evidence admissible?
Yes!
