In Caley v. Gulfstream Aerospace, the employer told the employees that as a condition of continued employment they had to agree to a new dispute resolution policy that would take effect in two weeks. Caley sued, contending the new policy was not backed by consideration, so there was no enforceable contract. The appeals court held that:
A) companies cannot offer employees contracts, so whether or not there was consideration is irrelevant
B) there was an offer and acceptance, but no consideration so there was no contract
C) there was an offer and consideration, but continued employment was not a sufficient method of acceptance so there was no contract
D) none of the conditions necessary for a contract were present so there was no contract
E) none of the other choices are correct

Question

Quizplus · Accepted Answer

The appeals court likely found that the new dispute resolution policy constituted a modification of the employment contract, which was supported by consideration. In employment law, continued employment can serve as consideration for new terms in an employment contract, making the new dispute resolution policy enforceable.

In Caley V