P leased retail space to D. $175/mo for 1st year, $200/mo for 2nd year.
Before the end of the 1st year, D told P that it was impossible for them to pay the rent increase for 2nd year.
D said that P allowed them to stay under the old rent until business improved.
P said that they accepted the old payment, but the remainder had to be paid.
D left without paying the last month's rent.
P sued D for last month's rent and for the $25/mo for the 11 months of the second year.
Procedural History:
District court ruled for P.
P won on appeal, no consideration in modified contract.
Issues:
Is consideration present in an orally modified contract brought about by special circumstances?
Holding/Rule: (ANTIQUATED)
Consideration is not present in an orally modified contract brought about by special circumstances.
Subsequent agreements must have new and independent consideration.
Reasoning:
Since the second contract did not change the terms for the promisor, the promisor was already legally bound to perform the actions prescribed in the second contract. A promise to do what the promisor is already legally bound to do does not provide consideration.
For the second contract, there must be adequate consideration to support an ordinary contract, i.e. the contract should be examined completely separate from the first contract.
