Sue is three months behind on her mortgage,and her lender filed negative information affecting her credit rating.Sue mailed one monthly payment to the lender along with a letter providing that she was making the payment on condition that the lender removes negative material sent to credit reporting agencies affecting her credit rating.The lender cashed the check but did not remove the negative information.Sue sues the bank for breach of contract.Which of the following is the most likely result?
A) The bank will win because under the preexisting duty rule, Sue was already legally obligated to make the payment, and there was no consideration to support the contract.
B) The bank will win because under federal law, once correct negative information is reported regarding a customer, it can be removed only if it is found to be untruthful.
C) The bank will win because under state law, once correct negative information is reported regarding a customer, it can be removed only if it is found to be untruthful.
D) Sue will win because the bank's cashing the check constituted acceptance of her offer, and a valid contract existed.
E) Sue will win because the bank had an obligation to notify her that it was not accepting her offer before cashing the check.

Question

Quizplus · Accepted Answer

Under similar facts in the case in the text Thomas v. CitiMortgage Inc., in ruling for the defending bank, the court stated that "[t]he preexisting duty rule provides, …that when a party does what it is already legally obligated to do, there is no consideration because there has been no detriment."

Sue Is Three Months Behind on Her Mortgage,and Her Lender