Panda Industries agreed to supply 500 tons of steel rebar to ABC Builders for a price of $250 per ton.Shortly after the contract came into effect,the market price of rebar rose to $275 per ton.Fortunately,ABC Builders was agreeable to paying the hew higher price.Why might ABC Builder's promise to pay an additional $25 per ton be unenforceable?

Question

Quizplus · Accepted Answer

The promise to pay an additional $25 per ton might be unenforceable due to the absence of fresh consideration. In contract law, consideration refers to something of value that is given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances. Fresh consideration means that for any modification or new promise in a contract, there must be new value given in exchange. Since ABC Builders' promise to pay an additional $25 per ton does not seem to involve any new value or benefit conferred to Panda Industries beyond what was already agreed upon, it lacks fresh consideration.

Panda Industries Agreed to Supply 500 Tons of Steel Rebar