Holes Inc. begins digging a foundation at a construction site for Investment Company under a contract for a certain price. After six months, Holes demands a higher price because of extraordinary difficulties that were totally unforeseen at the time the contract was formed. An agreement to pay the higher price 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 agreement to pay a higher price is enforceable due to unforeseen difficulties. This is an exception to the preexisting duty rule, which generally states that a promise to do something you're already legally obligated to do is not considered valid consideration for a new promise. However, if unforeseen difficulties significantly change the nature of the performance, making it far more burdensome than could have been anticipated, courts may find that the modification of the contract is supported by new consideration because the circumstances have materially changed.

Holes Inc Begins Digging a Foundation at a Construction Site for for Investment