That is to say, if the modification involves the performance of an act that is similar to, but not exactly the same as, the performance required under the pre-existing contract, there is consideration for a promise to pay more money. Under the original contract, had Peter not provided Bob with the marijuana, he would have had a valid defense for breaching the contract because, at the time the contract was made, selling marijuana was illegal. Therefore, a modification that is not fair or equitable would not be considered binding. Martino 103 A 24 N. For Example: Mike hires a contractor to build him a house. I offer online tutoring and consultations with discounts for subscribers.
At this point, a replacement contractor cannot be easily found, and Mike will endure a substantial economic hardship in looking for and hiring a new contractor. The legal duty rule is found in two different kinds of pre-existing contractual duty cases. For example: Mike hires a contractor to build a house. Preexisting duty rule is a common-law rule of contract. After the trial, Wendy refuses to give him any free hamburgers. Essentially, the legal duty rule does not apply if the pre-existing duty is owed to someone other than the person who makes the new promise. For example: Wendy owns a hamburger shop located on Main Street.
For example, a government employee polygraph expert might ask a criminal about an unrelated crime during the administration of a polygraph. Explain how the common law pre-existing duty rule applies to modifications. Faced with the prospect of not having his desired work completed, the homeowner agrees. Foundation Press, New York: 2008, p. Also, please visit my website and blog. Through questions based on a series of hypothetical cases, underlying reasons for the doctrine are considered, as well as its ramifications in various contexts. Also, in some states, parties may renegotiate to include additional benefits if, for example, the party performs unexpected or additional duties, the parties assent in or a new contract is agreed.
However, because Dave has no official responsibilities as a police officer in Las Vegas, keeping his eye on the hamburger shop is not within any official duties that Dave has and, therefore, the promise is enforceable. Both these modifications to the original contract would be enforceable because there was consideration for each. For example: Mike hires a contractor to build him a house. He tells the homeowner that he will walk away from the project unless he is paid more for his services. In this case, the architect has promised to render the same performance while Mike has agreed to pay more than the amount he originally agreed to pay. Please note that certain jurisdictions have avoided the legal duty rule by saying that the modification of the old contract constitutes a mutual rescission of the old contract and the formation of a new contract. Determine whether the modification of a contract is enforceable under the modern common law rule.
Because other contractors were available at the time Mike made the new agreement and the contractor had completed performance at the time Mike paid, Mike was not under any economic duress either at the time he made the new agreement or at the time of payment. During his first day in Las Vegas, Dave sees a local hamburger shop. The pre-existing duty rule has been abrogated under the Restatement, Second of Contracts § 89, which does not require independent consideration if the parties mutually and voluntarily agree to the modification see for an early application of the Restatement. The second exception is where the pre-existing duty under the contract is owed to one person and a third party makes a promise based on that duty. While the pre-existing duty rule applies today, these and other concerns have given rise to several exceptions to the rule.
Thus, in the new contract, although Bob is agreeing to pay more money for the same performance by Peter, the contract is valid because this is not a promise to perform a pre-existing legal duty. Lucciano, a Metro season ticket holder, is anxious to ensure that the concert will be performed. Where contractual parties owe each other existing contractual obligations, but a third party offers a promise contingent upon performance of the contract, that promise has sufficient consideration. Therefore, the legal duty rule does not apply, and the modification is valid. The rule will apply, so Julian could agree to pay the extra money, but then not do so when the books are delivered. Reference Desk: McCallum Highlands, Ltd. However, Mike agrees to pay the extra money.
However, if the new promise is made under economic duress he can recover the payments that are in excess of the original contract agreement. Distinguish between an executory accord and a substituted contract. Andre gives the concert but Lucciano refuses to pay. If the criminal admits to the crime and the employee then seeks a reward for identifying the perpetrator, he would not be entitled to it under the legal duty rule because he already has a public duty to find out about crimes. As far as public duties are concerned, the legal duty rule says that neither the promise by an official to perform an act that is within the scope of his official duties nor the actual performance of the promise is valid consideration. The next exception to the bargain principal of consideration is the legal duty rule.
Therefore, the promise under the new contract is enforceable because it is just that, a promise under a new contract. For example: Mike hires an architect to build a house. Coverage includes: the performance of duties owed to the promise or third parties as consideration; modifications on one side of executory contracts; substituted contracts following rescission; executory accords; satisfaction; liquidated claims and offers to settle unliquidated claims. Here, although there is a very small difference between the old contract and the modification, the promise to use bullet proof glass instead of regular glass is enough to constitute consideration. However, even if the homeowner agrees to this modification, the modification may not be binding under the pre-existing duty rule since the plumber had a pre-existing duty to replace the piping with copper before the modification.
The sixth exception to the legal duty rule is where the contract has been performed already. The fifth exception to the legal duty rule is where the contract being modified is for the sale of goods. Pay more One party refuses to perform their side of the contract unless a larger sum of money is paid. Learning Outcomes On completion of the lesson, the student will be able to: 1. The legal duty rule protects one party when the other is trying to unilaterally change the terms of the agreement.
He has to offer some new consideration to the other party to induce that other party to agree to the change. For example: Dave promises Wendy that, in exchange for free hamburgers, he will not only keep an eye on her store but he will also check each night and make sure that the doors and windows of the restaurant are locked. For example: Dave, a police officer in New York, decides to take a long overdue vacation to Las Vegas. Contracts: What is a preexisting duty? The foregoing very likely enforceable contract if B accepts because A gave something more to B than what he was legally obligated — i. Similarly, a party that refrains or promises to refrain from doing what that party is already legally or contractually obligated to refrain from doing does not constitute sufficient consideration to support a new contract or a modification to an existing contract. It is not a promise to perform a pre-existing legal duty.