Business Law and the Regulation of Business 11th Edition by Richard Mann, Barry Roberts

تمرين 14

FACTS On October 26, 1995, the defendant, Empire Paving, Inc., entered into a contract with Rock Services under which Rock Services would provide drilling and blasting services as a subcontractor on the Niles Hill Road sewer project on which Empire was the general contractor and the city of New London was the owner. Rock Services was to be paid an agreed-upon price of $29 per cubic yard with an estimated amount of five thousand cubic yards, or on a time and materials basis, whichever was less. From the outset, Rock Services experienced problems on the job, the primary problem being the presence of a heavy concentration of water on the site. The water problem hindered Rock Services' ability to complete its work as anticipated. It is the responsibility of the general contractor to control the water on the work site and, on this particular job, Empire failed to control the water on the site properly. Rock Services attempted alternative methods of dealing with the problem, but was prevented from using them by the city. Thereafter, to complete its work, Rock Services was compelled to use a more costly and time-consuming method.
In late November 1995, Rock Services advised Empire that it would be unable to complete the work as anticipated because of the conditions at the site and requested that Empire agree to amend the contract to allow Rock Services to complete the project on a time and materials basis. On December 8, Empire signed a purchase order that so modified the original agreement. Upon completion of the work, Empire refused to pay Rock Services for the remaining balance due on the time and materials agreement in the amount of $58,686.63, and Rock Services instituted this action. The trial court concluded that the modified agreement was valid and ruled in favor of Rock Services. Empire brings this appeal.
DECISION Judgment in favor of Rock Services affirmed.
OPINION Schaller, J. In concluding that the modification was valid and enforceable, the trial court determined that the later agreement was supported by sufficient consideration. ***
''The doctrine of consideration is fundamental in the law of contracts, the general rule being that in the absence of consideration an executory promise is unenforceable.'' [Citation.] While mutual promises may be sufficient consideration to bind parties to a modification; [citations] a promise to do that which one is already bound by his contract to do is not sufficient consideration to support an additional promise by the other party to the contract. [Citations.]
A modification of an agreement must be supported by valid consideration and requires a party to do, or promise to do, something further than, or different from, that which he is already bound to do. [Citations.] It is an accepted principle of law in this state that when a party agrees to perform an obligation for another to whom that obligation is already owed, although for lesser remuneration, the second agreement does not constitute a valid, binding contract. [Citations.] The basis of the rule is generally made to rest upon the proposition that in such a situation he who promises the additional [work] receives nothing more than that to which he is already entitled and he to whom the promise is made gives nothing that he was not already under legal obligation to give. [Citations.]
Our Supreme Court in [citation], however, articulated an exception to the preexisting duty rule:
[W]here a contract must be performed under burdensome conditions not anticipated, and not within the contemplation of the parties at the time when the contract was made, and the promisee measures up to the right standard of honesty and fair dealing, and agrees, in view of the changed conditions, to pay what is then reasonable, just, and fair, such new contract is not without consideration within the meaning of that term, either in law or in equity.
*** What unforeseen difficulties and burdens willmake a party's refusal to go forward with his contract equitable, so as to take the case out of the general rule and bring it within the exception, must depend upon the facts of each particular case. They must be substantial, unforeseen, and not within the contemplation of the parties when the contract was made. [Citation.] This theory of unforeseen circumstances is applicable to the facts of this case.
Empire argues strenuously that the water conditions on the site cannot qualify as a new circumstance that was not anticipated at the time the original contractwas signed. ***
Empire's argument, however, is misplaced. Rock Services does not argue that it was unaware of the water conditions on the site but, rather, that Empire's failure to control or remove the water on the site constituted the new or changed circumstance. Rock Services argues that Empire's duty to control or remove the water on the job site arose in accordance with the custom and practice in the industry and, therefore, Empire's failure to control or remove the water on the site constituted a new circumstance that Rock Services did not anticipate at the time the original contract was signed.
***
In addition to finding that Empire had a duty to control or remove the water from the job site, the trial court found further that Empire's failure to control or remove the water from the site made Rock Services' working conditions sufficiently burdensome to prevent Rock Services from completing the work as anticipated, forcing Rock Services to attempt to use a different method of drilling and ultimately compelling Rock Services to use the more costly and time consuming method of casing the blasting hole. The trial court further found that Empire's failure to control or remove the water on the site constituted a new circumstance not anticipated by the parties at the time the original contract was signed. In addition, the trial court also found that Rock Services' request for the modification was not wrongful but, rather, was justified under the circumstances and did not constitute duress as a matter of law.
Upon our review of the record, we conclude that the trial court's findings of fact are supported by the record and are not clearly erroneous. ***
INTERPRETATION The Restatement provides that a modification of an executory contract is binding if it is fair and equitable in the light of surrounding facts that the parties had not anticipated when the contract was made.
CRITICAL THINKING QUESTION Which rule for contract modification do you believe is the best: the common law, the Restatement's, or the Uniform Commercial Code's? Why?