Modification of Terms

Question 1

Consideration (Modifications)

Answer 1

Common Law: A contract cannot be modified unless the modification is supported by new consideration.

UCC: Promises of new or different terms by the parties to a sales contract are valid without consideration.

Question 2

Writing (Modifications)

Answer 2

Rule: A written contract can be modified orally. However, for sale of goods contracts if the contract as modified falls within the statute of frauds then it must be evidenced by a writing.

Common Law:

• Even if a contract expressly provides that it may modified by a writing, the parties CAN orally modify the contract.

UCC:

• If a contract explicitly provides that it may not be modified or rescinded except by a signed writing, that provision is given effect. However, if contract is between MERCHANT - NONMERCHANT this provision requires the nonmerchant’s signature.

Question 3

Parol Evidence as to Modifications

Answer 3

Parol Evidence is admissible to show subsequent modifications of a written contract.