Stintson Corp. had agreed to create employee identity cards for McLaughlin Inc. for $60,000. Some of the cards delivered by Stintson Corp. had damages made during the lamination process. McLaughlin Inc. promised Stintson Corp. an additional $20,000 to replace the damaged identity cards, and Stintson Corp. did so. Then McLaughlin Inc. refused to pay Stintson Corp. more than $60,000 for the work. Which of the following statements is true of this situation?
A) Stintson Corp. is not entitled to any more than $60,000 for its work.
B) McLaughlin Inc. owes Stintson Corp. the additional $20,000.
C) Stintson Corp. would still be entitled only to $60,000 because such an act is new consideration that was provided to support the modification.
D) Stintson Corp. is entitled to the additional $20,000 as legal value has nothing to do with adequacy of consideration.

Question

Quizplus · Accepted Answer

By far the greatest number of preexisting duty cases involve contractual duties. These cases usually occur when the parties attempt to modify an existing contract but no new consideration is furnished to support the agreement to modify. In this scenario, providing more identity cards to McLaughlin Inc. in order to replace the damaged ones is merely a continuation of the preexisting duty.