Study for the Bar in Your Car

Contract Law - Contract Modification


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Contract modification can feel like a tangled knot, but mastering it is key for the bar exam! The Study for the Bar in Your Car podcast cuts through the confusion in this essential episode, guiding you through the rules governing how contracts change after they're made.

The biggest hurdle? Understanding the stark differences between the UCC (Uniform Commercial Code), which applies to the sale of goods, and common law, which governs services and other contracts.

Under the UCC, modifying a contract for goods is surprisingly flexible. You generally need no new consideration to make a modification binding. The critical requirement is that the modification must be made in good faith. We explore important nuances like No Oral Modification (NOM) clauses (which can sometimes be waived by conduct) and the process of mutual recision, where both parties agree to cancel the original deal (only possible if duties are still executory for both sides). We also touch on waiver, a party choosing not to enforce a term, which likewise needs no consideration under the UCC.

Common law modification, however, sticks much more firmly to the requirement for new consideration. The notorious pre-existing legal duty rule dictates that simply promising to do what you're already contractually obligated to do isn't enough to support a modification for, say, extra payment. But fear not, we break down the crucial exceptions that can save a common law modification, including:

  • Offering new or different consideration.
  • Modifying a voidable obligation (like a minor's contract).
  • Promising to perform a duty already owed to a third party.
  • Modifications made to settle a genuine dispute.
  • In some limited cases, modifications due to truly unforeseen circumstances.

The episode also revisits vital related concepts like good faith and fair dealing, promissory estoppel (detrimental reliance) as an alternative enforcement theory, and accord and satisfaction as a way to discharge duties.

Understanding when consideration is needed (common law) versus when it's not (UCC for mods) is paramount for bar exam success. Don't let contract modification trip you up! Tune in to Study for the Bar in Your Car for a clear, actionable breakdown of these rules. Listen and subscribe to build confidence for your bar exam!

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Study for the Bar in Your CarBy Angela Rutledge, LLM, LLB

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