BUS311_chapter_04

If max acquiesces he is bound the ucc says that a

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Unformatted text preview: nd to make the extra payment. It doesn’t matter that this is nominal consideration; the law doesn’t generally concern itself with whether the parties have made a good deal or whether consideration is of equal value. However, if the contract involves goods, we get a different result under UCC Section 2-209. Keisha promises to sell ten office computers preloaded with certain software to Max for $4,500. Keisha now discovers that installing the software is taking more time than she thought, and she demands that Max promise in writing to pay her an extra $1,000. If Max acquiesces, he is bound. The UCC says that a good faith modification of an existing sales of goods contract needs no new consideration to be binding. Of course, Max could always refuse and threaten to sue Keisha on their original, binding contract if she fails to go through with the deal. A firefighter’s job requires trying to put out fires, so if a homeowner offered “I’ll give you a thousand dollars if you save my house,” the promise would not be binding. The firefighter has a preexisting duty to fight fires, and so gave no consideration. A common example where the preexisting duty rule comes into play is in the maXx images/SuperStock area of agreements modifying a preexisting debt. In general, a person who owes a debt to another cannot enter into an agreement to pay a lesser amount, since there is no consideration for the new agreement. Example 4.29. Daniel owed Carla $50,000 that was due last June. Now, in November, he still hasn’t paid anything and Carla is starting to think he never will. Daniel now proposes that in exchange for his paying $40,000 next week, Carla promise to take that sum as payment in full. Carla, feeling she may never see the money otherwise, agrees. rog80328_04_c04_062-088.indd 81 10/26/12 5:42 PM Section 4.4 Consideration CHAPTER 4 Can Carla collect the $40,000, then turn around and sue Daniel for the remaining $10,000 on the original debt? In most states, the answer is yes. She is not bound to her promise to accept the lesser sum as full payment, because she received no new consideration. Daniel’s payment of the $40,000 was just part of what he already owed: he had a preexisting legal duty to pay tha...
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