Prof. Litvin, you are a great tutor , but for more precise law:
http://www.lexinter.net/LOTWVers4/modification_of_executory_contract.htm
Indeed, paragraph cited deals with bargains
which are without consideration only because of the rule that performance of a legal duty to the
promisor is not consideration. See §73.
The rule
of §73 finds its modern justification in cases of promises made by
mistake or induced by unfair pressure. "fair and equitable" requires an objectively demonstrable reason for seeking a
modification. Compare Uniform Commercial Code §2-209 Comment. The reason for modification must rest in
circumstances not "anticipated" as part of the context in which the contract was made, but a
frustrating event may be unanticipated for this purpose if it was not adequately covered,
even though it was foreseen as a remote possibility.
please take a look at following illustration. all of showing gross impact (either one time or over periods of time for "mistaken" party"
Illustrations:
1. By a written contract A agrees to excavate a cellar for B for
a stated price. Solid rock is unexpectedly encountered and A so notifies B. A and B then
orally agree that A will remove the rock at a unit price which is reasonable but nine times that used in
computing the original price, and A completes the job. B is bound to pay the increased amount.
Is it fair and equitable in the hypo with original price 500K ---> 520K????
5% of K price.
So I hire a remodel contractor for $20K , he rips my kitchen and comes back to me asking for $21K b/c piping price miscalculation, I agree, and I am bound?
I will rather show him Rest2, and the max of the recovery would be $20K.
because if we follow fair and equitable, he would be jacking up the price every day.
2. A contracts with B to supply for $300 a laundry chute for a
building B has contracted to build for the Government for $150,000. Later A discovers that he
made an error as to the type of material to be used and should have bid $1,200. A offers to
supply the chute for $1000, eliminating overhead and profit. After ascertaining that other suppliers
would charge more, B agrees. The new agreement is binding.
3. A is employed by B as a designer of coats at $90 a week for a
year beginning November 1 under a written contract executed September 1. A is offered $115
a week by another employer and so informs B. A and B then agree that A will be paid $100 a week
and in October execute a new written contract to that effect, simultaneously tearing up the
prior contract. The new contract is binding.
4. A contracts to manufacture and sell to B 2,000 steel roofs
for corn cribs at $60. Before A begins manufacture a threat of a nationwide steel strike raises
the cost of steel about $10 per roof, and A and B agree orally to increase the price to $70 per roof.
A thereafter manufactures and delivers 1700 of the roofs, and B pays for 1,500 of them at the increased
price without protest, increasing the selling price of the corn cribs by $10. The new agreement is
binding.
5. A contracts to manufacture and sell to B 100,000 castings for
lawn mowers at 50 cents each. After partial delivery and after B has contracted to sell
a substantial number of lawn mowers at a fixed price, A notifies B that increased metal costs
require that the price be increased to 75 cents.
Substitute castings are available at 55 cents, but only after
several months delay. B protests but is forced to agree to the new price to keep its plant in operation.
The modification is not binding.