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Finding Contract Modifications

Parties frequently modify (change the terms of) the contract after they make it. Technically, a contract modification is a new contract requiring consideration. When one party promises to give something up and the other doesn’t, courts sometimes invoke the pre-existing duty rule to determine whether the modification is enforceable. However, the pre-existing duty rule has several exceptions, including the following:

  • The UCC says in § 2-209(1) that consideration is not needed for a modification.

  • The modern rule found in Restatement § 89 says that consideration is not needed if the modification is fair and equitable in light of changed circumstances.

  • For an accord (an agreement to settle a debt by paying less), consideration is needed. Consideration is often found if the debt is unliquidated or disputed.

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