. Forum

[releasethehounds]

Ks gurus, I want to confirm something about the pre-existing duty rule and consideration.

As I understand it, a pre-existing duty is not valid consideration at common law, but can become valid if someone gives something in addition to what she's already obligated to give, or alters the consideration somehow. On this last point, can the alteration seriously be anything? E.g., I have a pre-existing duty to deliver a blue shirt with silver buttons to you. We agree that I'll give you a blue shirt with gold buttons on it instead and you now pay me more money. That's all copacetic, right? Even if it's just the tiniest alteration in the pre-existing performance obligation?

Should be good. You're giving me something you weren't legally obligated to give me (because you were legally obligated to give me a blue shirt with silver buttons) in exchange for something I wasn't legally obligated to give you (mas dinero).

I believe the alteration can be absolutely anything. There was an MBE where a performer was hired to do a show at a party with a leopard. She said she couldn't do it anymore but could do it with a white tiger for $500 more. THis was adequate additional consideration even though the trainer was basically refusing to perform the original contract.

Okay this is long and I seriously apologize in advance because I know I'm going beyond the scope of what everyone's talking about. Also this is partially just for me and I'm making people read it or scroll past it. But:

To be clear, as the quoted reply got attached to a UCC point, that's one of the reasons distinguishing between sale of goods and services contracts is so important. in the example with the shirt, that's a UCC deal because it's a sale of goods contract. There does NOT need to be valid additional consideration, just good faith. The UCC does not require additional consideration: it just requires good faith to be present.

Services deals are instead subject to the common law. In a services deal, each party has to do something they weren't required to do earlier. And by 'required' we mean, are they doing something additional under the contract that they were not obligated to do before. In the question referenced, it's a contract for services. And so for a valid modification, each party has to give valid consideration. She was legally obligated to perform with a leopard or lion or whatever the question was. She was not legally obligated to perform with a tiger. The party paying for the show was not legally obligated to pay $500 more. Each has taken on a legal obligation they did not have before. It gets confusing because we want to say 'the contract was for a performance and she's still required to perform. She didn't offer to wash someone's car as well, or something'. But thinking about it logically, the shows are likely completely different--different routine, different animal, different length, different props, different price. The idea behind entering into the the deal in the first place probably isn't 'i want a woman to come perform with an animal', the idea is probably 'i want a woman to come perform with a leopard' or lion or tiger or bear (oh my).

It gets even more confusing when you start to introduce risk. For example, when you get a question that says something like: " A has a contract to excavate and install a pool for B and B will pay $50,000. A begins work and encounters some level of sheet rock that will make the contract 10,000 more expensive to perform. A tells B about the sheet rock and that it will be more expensive to perform, then tells B it will not finish the pool without an additional payment of $10,000."

This is NOT a valid modification: Yes, now A has to excavate sheet rock and yes now it's going to be more expensive, but at the end of the day when you look at the contract, A is still just building a pool. B isn't getting anything additional: just the pool they already contracted to get. Removing the sheet rock is something that A has to do in order to do what they were already legally obligated to do. This case is one where foreseeability of the arising circumstance comes up: I know nothing about building pools or excavation, but I imagine it's pretty foreseeable that you'd start digging and encounter a layer of rock that is going to add expense to your job. But that's the risk you take as a contractor who builds or installs or whatever it is you do with a pool to make it appear.

At the end of the day, a modification of a services contract is a mini-contract of its own, and it needs consideration just like the contract it's piggy-backing onto did. I scared the crap out of myself because I literally just tried to analogize it to lesser included and greater included offenses in crim law, but the analogy actually kind of works: Can you fully perform the original contract and to the bargained for specification without doing this extra thing? No? then it's not valid consideration for a modification.

Can I complete this installation of this pool to the same contracted for specifications without removing this rock? No? Not consideration, because i had to do it to perform the contract anyways.
Can I perform a show with a leopard to the same contracted for specifications without performing a show with a tiger? Yes? Consideration. I didn't have to do it to perform the contract anyways because the contract was for a show with a particular animal (the fact that the performance with the leopard wasn't possible does not actually factor into the consideration analysis. It may factor in to a different argument centering around frustration of purpose, but not consideration)

[Talar]

I sort of think your pool modification example would be a valid modification. (I could be wrong).

[releasethehounds]

I sort of think your pool modification example would be a valid modification. (I could be wrong).

I don't think it is. I've gotten many an MBE question wrong saying 'but he didn't have to remove the rock, so he's doing something new!' just for Themis to go 'oh, silly child...No.'

EDIT: Actually since I completely lifted the example from an essay question, I'll just point you to what I was referencing:

FACTS (previous contract: pool for 50k): Jones started the excavation for the pool in late April but encountered ledge rock underground which made it very difficult and more expensive to build the pool. On June 1, 2004, Jones’ President, Jack, called Abby and told her that it would cost an additional $10,000 to build the pool because of the problems with the ledge. Jones refused to perform any more work until Abby agreed to pay the additional $10,000. Abby paid the additional $10,000.

and then their explanation in the model answer:

Abby will likely be able to recover the $10,000 she paid to Jones to continue building the pool. Under common law, to modify a contract there needs to be consideration, or an unforeseeable circumstance that made contract performance substantially more difficult. In this case, there was no consideration, since Jones was not performing extra work for the additional $10,000. Abby will argue that Jones should have foreseen the ledge rock, as Jones was in a better position to plan for such occurrences and that Jones bore the risk of such things happening. Jones will argue that they had an excuse for not performing. It may argue that the ledge rock, making it more time consuming, was an excuse. Jones will argue impracticability, which states that one is excused from performance if there was an unforeseen event, neither party could have bargained for, that made the contract commercially impractical, more than mere lost profits. Jones will not prevail because it can be argued they could have foreseen the rock, and since Abby paid the additional money, it was not commercially impractical.

I probably stretched the law further than it actually goes, but this is what I was going off of. Also many MBE questions that made me want to punch infants.

[dsclaw]

I sort of think your pool modification example would be a valid modification. (I could be wrong).

I am pretty sure you a right, a modification to do something you already were required to do can occur if there was a unforeseeable circumstance with regards to the expected performance. So if encountering said sheet rock was unforeseeable at the time of the contracting then the modification to the contract would be binding.

[releasethehounds]

I sort of think your pool modification example would be a valid modification. (I could be wrong).

I am pretty sure you a right, a modification to do something you already were required to do can occur if there was a unforeseeable circumstance with regards to the expected performance. So if encountering said sheet rock was unforeseeable at the time of the contracting then the modification to the contract would be binding.

I addressed that by saying it was foreseeable. I completely agree that an unforeseen circumstance can excuse obligation to perform so the agreement to keep performing would constitute consideration. But for the example I used, I was talking about the importance of evaluating foreseeability and risk, and arguing it was a foreseeable circumstance that wouldn't excuse performance.

[Talar]

I sort of think your pool modification example would be a valid modification. (I could be wrong).

I don't think it is. I've gotten many an MBE question wrong saying 'but he didn't have to remove the rock, so he's doing something new!' just for Themis to go 'oh, silly child...No.'

Haha. Ya, maybe so. If you don't mind, post relevant examples here if you find them? Maybe we can settle this shit once and for all. I found this example from the Simulated exam (attached below). I realize that removing "mold" is a little different from your example and is probably less "foreseeable."

Question Text: A homeowner hired a contractor to finish her basement. They agreed on a price of $20,000 for the job. During the final stages of the remodeling, the contractor discovered that there was mold in the basement, the existence of which had been unknown to either party. The contractor refused to complete the job unless the homeowner paid an additional $2,000 to the contractor for removal of the mold. The homeowner reluctantly agreed, and the contractor finished the basement in accord with the modified contract. The homeowner paid the contractor $20,000. In a breach of contract action to recover the $2,000, will the contractor prevail?
Answer Choices:

No, because a contractual modification is not enforceable without consideration.
No, because the unforeseen circumstances did not rise to the level of impracticability.
Yes, because the homeowner agreed to the price increase.
Yes, because the modification was based on a mutual mistake.

Rationale: Answer choice C is correct. Under the common law, which applies to a construction contract, a contract generally cannot be modified without consideration. Here, the contractor proposed modifying the contract to increase the contractor’s compensation in exchange for the removal of the mold from the basement. Since the homeowner agreed to the modification and the contractor finished the basement in accord with the modified contract, the homeowner is liable to the contractor for the additional $2,000. Answer choice A is incorrect because, although it is true that the modification of a construction contract generally requires consideration, consideration exists in this case. Answer choice B is incorrect because, since there was consideration for the modification, it is irrelevant whether the circumstances that gave rise to the modification were unforeseen. Answer choice D is incorrect because the fact that the modification arose because neither party was aware of the presence of the mold is irrelevant to the enforcement of the contract as modified. While it is unlikely that this mistake would have been judged to have a material effect on the parties’ contractual obligations and thereby given the homeowner grounds for avoiding the contract, the homeowner is not seeking to void the contract, but merely to avoid the consequences of the modification to the contract, which occurred after the parties became aware of the presence of the mold.

[dsclaw]

I sort of think your pool modification example would be a valid modification. (I could be wrong).

I don't think it is. I've gotten many an MBE question wrong saying 'but he didn't have to remove the rock, so he's doing something new!' just for Themis to go 'oh, silly child...No.'

Haha. Ya, maybe so. If you don't mind, post relevant examples here if you find them? Maybe we can settle this shit once and for all. I found this example from the Simulated exam (attached below). I realize that removing "mold" is a little different from your example and is probably less "foreseeable."

Question Text: A homeowner hired a contractor to finish her basement. They agreed on a price of $20,000 for the job. During the final stages of the remodeling, the contractor discovered that there was mold in the basement, the existence of which had been unknown to either party. The contractor refused to complete the job unless the homeowner paid an additional $2,000 to the contractor for removal of the mold. The homeowner reluctantly agreed, and the contractor finished the basement in accord with the modified contract. The homeowner paid the contractor $20,000. In a breach of contract action to recover the $2,000, will the contractor prevail?
Answer Choices:

No, because a contractual modification is not enforceable without consideration.
No, because the unforeseen circumstances did not rise to the level of impracticability.
Yes, because the homeowner agreed to the price increase.
Yes, because the modification was based on a mutual mistake.

Rationale: Answer choice C is correct. Under the common law, which applies to a construction contract, a contract generally cannot be modified without consideration. Here, the contractor proposed modifying the contract to increase the contractor’s compensation in exchange for the removal of the mold from the basement. Since the homeowner agreed to the modification and the contractor finished the basement in accord with the modified contract, the homeowner is liable to the contractor for the additional $2,000. Answer choice A is incorrect because, although it is true that the modification of a construction contract generally requires consideration, consideration exists in this case. Answer choice B is incorrect because, since there was consideration for the modification, it is irrelevant whether the circumstances that gave rise to the modification were unforeseen. Answer choice D is incorrect because the fact that the modification arose because neither party was aware of the presence of the mold is irrelevant to the enforcement of the contract as modified. While it is unlikely that this mistake would have been judged to have a material effect on the parties’ contractual obligations and thereby given the homeowner grounds for avoiding the contract, the homeowner is not seeking to void the contract, but merely to avoid the consequences of the modification to the contract, which occurred after the parties became aware of the presence of the mold.

I remember getting that question wrong and even looking at it now I still disagree with it, to me the mold was a foreseeable aspect of the job. However I guess according to themis since its unknown to both parties it was not foreseeable and would be a valid modification

[releasethehounds]

I sort of think your pool modification example would be a valid modification. (I could be wrong).

I don't think it is. I've gotten many an MBE question wrong saying 'but he didn't have to remove the rock, so he's doing something new!' just for Themis to go 'oh, silly child...No.'

Haha. Ya, maybe so. If you don't mind, post relevant examples here if you find them? Maybe we can settle this shit once and for all. I found this example from the Simulated exam (attached below). I realize that removing "mold" is a little different from your example and is probably less "foreseeable."

No problem! I edited the post up there to put in the actual essay question that i lifted the example from entirely. And that question you posted is one that PISSED ME OFF SO HARD for the EXACT reason it pissed off dsclaw. but I suppose removing mold from a home isn't something a contractor does normally? IDK.

I'll take a few minutes and look up some of my (least) favorites from my contracts MBE comedy of errors performances, then post 'em

[Talar]

I remember getting that question wrong and even looking at it now I still disagree with it, to me the mold was a foreseeable aspect of the job. However I guess according to themis since its unknown to both parties it was not foreseeable and would be a valid modification

Right, I got that question wrong for the exact same reason. I've flip-flopped on this issue several times now because I feel like Themis isn't giving me a clear rule to work with and is judging "foreseeability" loosely. In the example above, they even say foreseeability doesn't matter (if you read the explanation).

[Talar]

Right, Themis's main outline says: At common law, modification of an existing contract must be supported by consideration. Agreements to modify a contract may still be enforced if there are unforeseen difficulties, and one of the parties agrees to compensate the other when the difficulties are discovered if those difficulties would make performance impracticable.

So...do with that what you will

[forza]

So I'm doing MBE set #18, and I'm pretty sure the set just consists of all prior questions that I got wrong, because I recognize pretty much all of them.

On the bright side, I'm 18 for 18 so far. If this is your way of giving me a confidence booster two days before the exam, Themis, then thank you.

[releasethehounds]

Right, Themis's main outline says: At common law, modification of an existing contract must be supported by consideration. Agreements to modify a contract may still be enforced if there are unforeseen difficulties, and one of the parties agrees to compensate the other when the difficulties are discovered if those difficulties would make performance impracticable.

So...do with that what you will

Exactly. Which is why the foreseeability of the circumstance is so important. So going back to the pool example, turns on whether finding rock underground is foreseeable. I'd actually had another paragraph that I deleted before posting because it was way too long as it was, where I had the most ridiculous example. To sort of hammer it home, I had posited that if the pool guy started excavating and found a layer of monkeys just chilling in the earth that would be unforeseeable and excuse performance.

But it still comes back to doing something you weren't legally obligated to do: If a party encounters a circumstance that is unforeseeable and makes the contract impracticable ("impossible") to perform, what's really happened here is that performance by that party has been excused. So now we don't have an enforceable contract against them at all. But if they agree to keep performing on a contract that they're legally excused from in exchange for more money, then we've traded consideration. Everyone's doing something they didn't have to do. We had an unenforceable contract owing to a defense of impracticability that excused performance of BOTH parties, and we made a new contract. In that case, it doesn't matter that technically the party is not doing anything "additional"--they didn't have to anything anymore since they've been legally excused.

My complaint here is they tend to use examples from fields I know nothing about, so I have NO IDEA if a circumstance in that instance is "reasonably foreseeable" at all.

[Holly Golightly]

Just got a crim question about some dude sneaking into his friend's house to steal a stuffed animal. The question asked what was the most serious crime the guy could be charged with.

I say larceny. Themis says burglary. But in what world is stealing a stuffed animal a felony???

[Talar]

Right, I think we agree on what the law is. We just draw different lines at what is "foreseeable." I thought that the mold example was foreseeable and got it wrong. Assuming Themis is right in the mold problem (and I'm not convinced), then I think that would make your original example with the pool also not foreseeable and therefore it would be a valid modification.

[Talar]

Just got a crim question about some dude sneaking into his friend's house to steal a stuffed animal. The question asked what was the most serious crime the guy could be charged with.

I say larceny. Themis says burglary. But in what world is stealing a stuffed animal a felony???

larceny is a felony

[releasethehounds]

Just got a crim question about some dude sneaking into his friend's house to steal a stuffed animal. The question asked what was the most serious crime the guy could be charged with.

I say larceny. Themis says burglary. But in what world is stealing a stuffed animal a felony???

stealing a stuffed animal?

[dsclaw]

Right, Themis's main outline says: At common law, modification of an existing contract must be supported by consideration. Agreements to modify a contract may still be enforced if there are unforeseen difficulties, and one of the parties agrees to compensate the other when the difficulties are discovered if those difficulties would make performance impracticable.

So...do with that what you will

Exactly. Which is why the foreseeability of the circumstance is so important. So going back to the pool example, turns on whether finding rock underground is foreseeable. I'd actually had another paragraph that I deleted before posting because it was way too long as it was, where I had the most ridiculous example. To sort of hammer it home, I had posited that if the pool guy started excavating and found a layer of monkeys just chilling in the earth that would be unforeseeable and excuse performance.

But it still comes back to doing something you weren't legally obligated to do: If a party encounters a circumstance that is unforeseeable and makes the contract impracticable ("impossible") to perform, what's really happened here is that performance by that party has been excused. So now we don't have an enforceable contract against them at all. But if they agree to keep performing on a contract that they're legally excused from in exchange for more money, then we've traded consideration. Everyone's doing something they didn't have to do. We had an unenforceable contract owing to a defense of impracticability that excused performance of BOTH parties, and we made a new contract. In that case, it doesn't matter that technically the party is not doing anything "additional"--they didn't have to anything anymore since they've been legally excused.

My complaint here is they tend to use examples from fields I know nothing about, so I have NO IDEA if a circumstance in that instance is "reasonably foreseeable" at all.

I would just reword this slightly to assist those who are having difficulty. When a unforeseeable event happens such as encounter of a unexpected layer of sedimentary rock, such events was not part of the contract. In other words the performance of digging through the layer was not part of the consideration and as such a new agreement which incorporates the digging through that layer is a valid modification because it was not part of the original agreement.

[Holly Golightly]

Just got a crim question about some dude sneaking into his friend's house to steal a stuffed animal. The question asked what was the most serious crime the guy could be charged with.

I say larceny. Themis says burglary. But in what world is stealing a stuffed animal a felony???

larceny is a felony

At common law is larceny a felony regardless of the value of what's being stolen?

Because under statutory law, there is no way...

[dsclaw]

Just got a crim question about some dude sneaking into his friend's house to steal a stuffed animal. The question asked what was the most serious crime the guy could be charged with.

I say larceny. Themis says burglary. But in what world is stealing a stuffed animal a felony???

stealing a stuffed animal?

Question is just asking you for the elements, larceny is unlawful taking of another property with the intent to not return it (at the time of the taking) and burglary is the breaking and entering of a dwelling at nighttime with the intent to commit a crime therein. In your hypo, the intent to commit the crime was larceny. Therefore burglary is a possibility. Value of the item stolen is irrelevant only thing relevant is if its his own property or he believes it to be his own property.

[Talar]

Just got a crim question about some dude sneaking into his friend's house to steal a stuffed animal. The question asked what was the most serious crime the guy could be charged with.

I say larceny. Themis says burglary. But in what world is stealing a stuffed animal a felony???

larceny is a felony

At common law is larceny a felony regardless of the value of what's being stolen?

Because under statutory law, there is no way...

On the MBE you're usually asked to apply the common law.

[Holly Golightly]

Just got a crim question about some dude sneaking into his friend's house to steal a stuffed animal. The question asked what was the most serious crime the guy could be charged with.

I say larceny. Themis says burglary. But in what world is stealing a stuffed animal a felony???

larceny is a felony

At common law is larceny a felony regardless of the value of what's being stolen?

Because under statutory law, there is no way...

On the MBE you're usually asked to apply the common law.

Yeah, I get that. But is larceny always a felony at common law?

[releasethehounds]

Yeah, I get that. But is larceny always a felony at common law?

Yup

[Bikeflip]

Just got a crim question about some dude sneaking into his friend's house to steal a stuffed animal. The question asked what was the most serious crime the guy could be charged with.

I say larceny. Themis says burglary. But in what world is stealing a stuffed animal a felony???

stealing a stuffed animal?

I value my stuffed animals. If you take Mr Teddles I will savagely beat you.

[Talar]

Yeah, I get that. But is larceny always a felony at common law?

Of course, as long as the elements are met. There is no minimum dollar amount.

[releasethehounds]

I would just reword this slightly to assist those who are having difficulty. When a unforeseeable event happens such as encounter of a unexpected layer of sedimentary rock, such events was not part of the contract. In other words the performance of digging through the layer was not part of the consideration and as such a new agreement which incorporates the digging through that layer is a valid modification because it was not part of the original agreement.

I would more or less agree with the reword, except you're running dangerously close to the idea that 'if anything pops up we didn't originally contract for, it's new consideration' and that's not, strictly speaking, correct. I realize that you hit on the unforeseeability aspect, but to be clear:

If something pops up that just makes a contract more DIFFICULT to perform, it's not going to excuse performance or constitute valid consideration for a modification; but if it becomes SO DIFFICULT OMG IT MAKES NO SENSE TO DO THIS, WE'RE LOSING SO MUCH MONEY WE'LL BE PAYING YOU TO PERFORM THIS CONTRACT (which I guess would go to frustration of purpose which would again excuse performance?) or if it's just not at all reasonably foreseeable so we're excused from performing, then it will.

So I suppose my reword would really just be: If something comes up that would excuse performance by one party (impracticability, frustration of purpose, etc), and the party agrees to perform anyways in exchange for a change in compensation, that will constitute valid consideration by both parties and we have a valid modification to a services contract.

Also to be clear: seriously, the model answer states that the layer of rock encountered in excavating for the pool was reasonably foreseeable. This is really, really toeing a splitting hairs line and I absolutely agree with you both that foreseeability is in the eyes of the beholder, but if it comes up on the MBE or an essay, be sort of careful about what's foreseeable and what isn't (which, again: they keep using examples about fields I know nothing about so I can't even begin to judge the foreseeability of the circumstance). Even though it wasn't expressly contemplated in the 'original' agreement, removing the rock to complete the pool still not deemed 'extra performance' supporting a modification:

Under common law, to modify a contract there needs to be consideration, or an unforeseeable circumstance that made contract performance substantially more difficult. In this case, there was no consideration, since Jones was not performing extra work for the additional $10,000. Abby will argue that Jones should have foreseen the ledge rock, as Jones was in a better position to plan for such occurrences and that Jones bore the risk of such things happening. Jones will argue that they had an excuse for not performing. It may argue that the ledge rock, making it more time consuming, was an excuse. Jones will argue impracticability, which states that one is excused from performance if there was an unforeseen event, neither party could have bargained for, that made the contract commercially impractical, more than mere lost profits. Jones will not prevail because it can be argued they could have foreseen the rock, and since Abby paid the additional money, it was not commercially impractical.

My one really big nitpicking point with the model answer is that the logic seems circular: because the other person paid the additional money that they didn't have to pay (and since the K modification is unenforceable for want of consideration, we're making them give the money back because of it), the contract wasn't commercially impractical? I get that impracticability requires an unforeseen circumstance, but that phrasing just makes it sound like 'oh well even if it was unforeseeable, you got paid so it's practical again' If we're saying 'well you got paid, so now it's commercially practical again' and at the same time saying 'so give the money back', doesn't it make the contract commercially impractical again?


OKAY ALSO I SWEAR I'M GOING TO LET THIS GO NOW.