a party who owes a duty of performance under a contract is called the ________. This is a topic that many people are looking for. militaria-agent.com is a channel providing useful information about learning, life, digital marketing and online courses …. it will help you have an overview and solid multi-faceted knowledge . Today, militaria-agent.com would like to introduce to you Contract Law: The Pre-Existing Duty Rule. Following along are instructions in the video below:
Pre existing duty rule is a corollary to the requirement of consideration because consideration that that makes contracts enforceable must be bargained for consideration cannot. Consist of performance that the had a pre existing duty to perform if the party was legally required to do something in any case. Then agreeing to do that very thing is not new consideration.
That needs to have been bargained for by the other party therefore. A partys offer of a performance already required under an existing contract employment term or law is insufficient consideration for a new contract or the modification of an existing contract as a practical matter the pre existing duty rule also maintains the integrity of a contract by preventing parties from using leverage to coerce the other parties into contract modifications. Lets look at an example two parties.
A contractor and a homeowner enter into a contract for the renovation of a house. A week later the contractor becomes dissatisfied with how much he will be paid. He tells the homeowner that he will walk away from the project.
Unless. He has paid more for his services faced with the prospect of not having his desired work completed. The homeowner agrees under the pre existing rule.
The homeowners promise to pay the new amount is not enforceable because the contractor already had a pre existing duty to perform the work requested at the original price there has been no bargain for exchange for this modification. And so. The homeowner will not have to pay more some critics argue that the rule can be too far reaching because it makes contracts inflexible and in pedes modification.
That makes sense for example. Say. A plumber agrees to replace all the piping inside a home with copper pipes.
But before the project starts the price of copper skyrockets and it is no longer financially. Feasible for the plumber to replace the pipe. The plumber might reasonably ask the homeowner for additional payment to cover the cost of the increase in the price of copper.
However even if the homeowner agrees to this modification. The modification may not binding under the pre existing duty rule since the plumber had a pre existing duty to replace the piping with copper before the modification while the pre existing duty rule applies today these and other concerns have given rise to several exceptions to the rule. The first exception occurs when one party acts after relying on another partys modification of a contract moving back to our plumber example.
Imagine that after the homeowner agreed to pay a higher price. The plumber in reliance of that assurance. Hired a high quality subcontractor to work on the piping.
This good faith reliance on the modification may cause the modification to be enforceable. The second exception to the rule is when unanticipated circumstances arise leading to the parties to agree upon a reasonable contract modification examples of unanticipated circumstances leading to a required contract modification include strikes shortages economic depressions war and changed construction conditions when parties in response to these unanticipated emergencies. Agree to modifications generally increased payments in good faith.
The modifications are enforceable in spite of the fact that the called for performance was pre existing under the original agreement the uniform commercial code. Which applies to contracts for the sale of goods also substantially modifies the pre existing duty rule the ucc modifies the rule because it wants to assure contracting parties. The ability to freely adapt to changing circumstances.
Uc sees section 2 2 0. 9. 1.
Provides. 1 an agreement modifying a contract within. This article needs no consideration to be binding.
Though modification of sales contracts does not require new consideration. All modifications must be made in good faith. Which means honesty in fact in the conduct or transaction.
Concerned good faith for example does not occur. When one party intentionally misled or deceive. The other party when seeking a sale of goods contract modification as early as 1938.
One judge called the pre existing duty rule one of the relics of antique law. Which should have been discarded long ago despite its shortcomings the pre existing duty rule does maintain contract integrity and can effectively regulate contract modifications and prevent abuse of practice in renegotiations to ensure that it remains useful courts will continue to create exceptions to it and place qualifications on its application. .
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