This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
7 John King Co. v. Louisville & N. R. Co., 131 Ky. 46, 114 S. W. 308 [rehearing denied, 116 S. W. 1201].
8 Michaud v. McGregor, 61 Minn. 198, 63 N. W. 479.
9 See Sec. 384.
10 Michaud v. McGregor, 61 Minn. 198, 63 N. W. 479. (In this case A had performed and B had recovered from the city the amount of such additional compensation.)
11 Meech v. Buffalo, 29 N. Y. 198.
12 Creamery Package Mfg. Co. v. Russell, 84 Vt. 80, 32 L. R. A. (N.S.) 135, 78 Atl. 718.
13 Creamery Package Mfg. Co. v. Russell, 84 Vt. 80, 32 L. R. A. (N.S.) 135, 78 Atl. 718.
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A's promise to pay additional compensation, there was, in fact, an additional and substantial consideration; and the cases would have been decided in the same way, even if the courts had adopted the opposite rule. In many of the cases which are cited as authority for the proposition that performance of a prior contract is sufficient consideration for a new contract between the same parties, there was, in fact, a modification of the terms of the contract on each side. Thus if the owner makes a modification of the plans and specifications of a building contract, the assent of the contractor to such modification is consideration for a promise to pay additional compensation.1 A promise by the holder of a note to an endorser to pay a certain sum of money to the endorser, in consideration of the endorser's paying notes which were not yet due and payable, and upon which his liability had not been fixed by protest and notice, was held to be supported by a sufficient consideration.2 In other cases there was a waiver of a right to avoid the contract. If one party in good faith claims a right to rescind for mistake, his waiver of such right is consideration for a promise to pay additional compensation.3 If B is induced to enter into the contract by A's innocent misrepresentation for which B has a right to rescind, B's waiver of such right is a consideration.4 A, a mortgagee under a construction contract, agreed to pay to D, a subcontractor, the amount which D was to receive from the principal contractor, B, three-fourths of such sum to be paid when C had earned the payment which was due on the completion of the work, and the remaining one-fourth when C had earned the payment to be made thirty-three days after the completion of the work. Subsequently, when the first payment was overdue, A requested D to extend the time of such payment until D had completed the work, at which time A agreed to pay the entire amount. D completed such work in accordance with his contract with C. It was held that sufficient consideration for such new contract existed, and that A was bound to make such payments to D when D performed, although C never earned such last payment.5 If the parties differ in good faith as to the construction of a written contract, the waiver by one party of the construction for which he contends, is a consideration for a promise by the adversary party for additional compensation.6 In such cases there undoubtedly is a consideration; and such contracts would be enforced in jurisdictions in which performance of a prior contract between the same parties was held not to be a consideration.
1 Bishop v. Busse, 69 111. 403; Meyer v. Livesley, 66 Or. 383, 108 Pac. 121 [denying rehearing, 107 Pac. 476].
2 L'Amoreux v. Gould, 7 N. Y. 349, 57 Am. Dec 524.
3 Cooke v. Murphy, 70 111. 96.
4 Osborne v. O'Reilly, 42 N. J. Eq. 467.
5Swarteman v. Babcock, 218 Mass. 334, 105 N. E. 1022.
It has been suggested that although the promise to pay compensation in addition to the contract rate in consideration of performance, or the contract to furnish an additional quantity or a better quality for the same compensation, may lack consideration, and may be unenforceable while executory,7 -nevertheless, when the second contract has been performed in full, the original contract has been discharged, and no action can be maintained thereon.8 Where the original contract fixed the price at a certain unit of weight, and the seller, in order to induce the buyer to perform, agreed to furnish a larger unit for the same price, it was held that after the second contract had been performed, the seller could not recover upon the original contract.9