Onsite Restoration Inc. begins renovating houses for Property Company under a contract for a stated amount per house. After six months, Onsite demands an extra $20,000 per house, stating no reason for the extra $20,000, but asserting that it will stop work if it is not paid. The agreement is
A)enforceable as the consideration is past.
B)enforceable due to unforeseen difficulties.
C)unenforceable as an illusory promise.
D)unenforceable due to the preexisting duty rule.

Question

Quizplus · Accepted Answer

The preexisting duty rule states that a promise to do something that one is already legally obligated to do is not considered valid consideration for a new promise. In this case, Onsite Restoration Inc. is already under contract to renovate houses for a stated amount per house. Demanding extra payment without providing any new consideration (such as additional services) and threatening to stop work if not paid does not create a new valid contract but rather attempts to modify the existing one without valid consideration. Therefore, the agreement for the extra $20,000 per house is unenforceable due to the preexisting duty rule.