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What’s the Deal?

by | May 22, 2021 | Firm News |

Many common contractual situations involve a mutual exchange of performance. For instance, you agree to paint my house and I agree to pay you upon completion. But there are occasions when, after reaching an initial agreement, the parties decide to modify its terms. On the other hand, there are other times when one party insists that a modification has been made, but the other party denies this.

In order for a modification to be legally enforceable, there must be a mutual intention to alter the terms of the initial contract. For instance, you agree to paint my shed in addition to the initial agreement to paint my house.

Significantly, there must also be consideration to support the modification. Thus, there must be an exchange of value to support the additional performance of painting my shed, such as additional compensation. Without consideration, the modification is not enforceable. This prevents a contracting party from claiming that the original contract was modified to reduce its obligations without being able to point to an exchange of value that it provided to the other party.

These situations can be tricky. It is always a good idea to consult with an attorney about contractual matters.