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.
If a contract is existing between two parties, under which each party has rights and liabilities unperformed, a modification of such contract is supported by a sufficient consideration in the mutual waiver of the rights arising under the old contract.1 A contract which is in writing, but which is not required by statute to be in writing or to be proved by writing, may be modified by oral agreement if there are executory covenants upon each side.2 If A and B have entered into a valid contract by which they have agreed to marry each other, B's release of A from such contract is sufficient consideration for A's promise to support B.3 Even if the contract is broken, if there are mutual liabilities subsisting between the parties,4 or if the party who has broken the contract undertakes other and further obligations than those imposed by the original contract in return for a waiver of liabilities under the broken contract,5 or releases the adversary party from some independent liability,6 there is a sufficient consideration for such modification. If B is unable to perform under a contract whereby A had agreed to convey certain realty to B for a certain price, A's agreement to give B an extension of time is sufficient consideration for B's promise to take a smaller part of such land than he was entitled to under the original contract.7 If A refuses to perform because of breach by B, a new promise by B or a third person to induce A to perform, has consideration;8 and so where there is a bona fide dispute pending, compromise thereof is consideration for a new promise.9 Thus where A had delayed performance so that B was discharged from his obligation to perform by a certain time, a promise by A to pay extra compensation if B will perform in the time specified, has sufficient consideration.10 So where a contractor abandons the work, leaving the sub-contractor unpaid, a promise by the owner to pay the sub-contractor for completing his contract rests on consideration.11 Another form of stating this rule is that the parties may always rescind a contract executory on both sides and make a new contract.12 Thus where A had leased land to B, B to pay a certain number of bushels per acre, and the crop is nearly ruined by storms, they may agree that B shall replant and that A will take as rent one-half the crop.13 If A has sold land to B, and B has given a series of notes for the purchase price, a contract between A and B, by which it is agreed that A may sell the land upon a judgment to be rendered in his favor upon the first note of such series, and that he may keep the proceeds of such sale in consideration of which he discharges B from the remaining notes, is supported by sufficient consideration.14 If the parties have actually rescinded a contract which was executory on both sides, they may enter into a subsequent contract; and such contract, if otherwise valid, will not be rendered unenforceable by the fact that one of the parties is to receive a greater compensation than he would have received under the original contract for doing the same work, or rendering the same services as were provided therein.15 No objection can be made to this principle of law where the facts warrant its application. It is, however, frequently invoked to uphold a very different kind of transaction; that is, a transaction in which one party refuses performance without any legal excuse for such refusal, and the adversary party promises additional compensation to secure performance of the original contract.16
8Harrah v. Doherty, 111 Mich. 175, 69 N. W. 242.
1 Alabama. Warren v. Cash, 143 Ala. 158, 39 So. 124; Wellden v. Witt, 145 Ala. 605, 40 So. 126; Elliott v. Howison, 146 Ala. 568, 40 So. 1018.
Colorado. Henderson v. Spratlen, 44 Colo. 278, 98 Pac. 14; Leonard v. Hal-lett, 57 Colo. 274, 141 Pac. 481; Jones v. Jones, 1 Colo. App. 28, 27 Pac. 85.
District of Columbia. Hughes v. Brennan Construction Co., 24 D. C. App. 90.
Georgia. Crutchfield v. Dailey, 98 Ga. 462, 25 S. E. 526.
Illinois. Kissack v. Bourke, 224 111. 352, 8 L. R. A. (N.S.) 112, 79 N. E. 619.
Indiana. Sargent v. Robertson, 17 Ind. App. 411, 46 N. E. 925; Harrod v. State, 24 Ind. App. 159, 55 N. E. 242.
Iowa. Lamb's Estate v. Morrow, 140 la. 89, 18 L. R. A. (N.S.) 226, 117 N. W. 1118.
Kentucky. Proctor Coal Co. v. Strunk, 123 Ky. 520, 96 S. W. 603.
Massachusetts. Weld v. Nichols, 34 Mass. (17 Pick.) 538.
Michigan. Blagborne v. Hunger, 101 Mich. 375, 59 N. W. 657.
Missouri. Marshall v. Larkin, 82 Mo. App. 635.
Nebraska. Henry v. Vliet, 33 Neb.
130, 29 Am. St. Rep. 478, 49 N. W. 1107; Strahl v. Western Grocer Co. (Neb.), 98 N. W. 1043; Omaha Feed Co. v. Rushforth, 75 Neb. 340, 106 N. W. 25.
New Hampshire. Hildreth v. Academy, 29 N. H. 227.
New York. Oregon, etc., Ry v. Forrest, 128 N. Y. 83, 28 N. E. 137.
North Dakota. Kvello v. Taylor, 5 N. D. 76, 63 N. W. 889.
Pennsylvania. Dreifus v. Salvage Co., 194 Pa. St. 475, 75 Am. St. Rep. 704, 45 Atl. 370.
Tennessee. Lowry v. Strapp, 53 S. W. 194.
Utah. Pyre v. Kalbaugh, 34 Utah 306, 97 Pac. 331.
Washington. Anderson v. McDonald, 31 Wash. 274, 71 Pac. 1037.
Wisconsin. Buechel v. Buechel, 65 Wis. 532, 27 N. W. 318; Hathaway v. Lynn, 75 Wis. 186, 6 L. R. A. 551, 43 N. W. 956; Wisconsin Sulphite Fibre Co. v. D. K. Jeffris Lumber Co., 132 Wis. 1, 111 N. W. 237.
2 Elliott v. Howison, 146 Ala. 568, 40 So. 1018; Lamb's Estate v. Morrow, 140 la. 89, 18 L. R. A. (N.S.) 226, 117 N. W. 1118; Strahl v. Western Grocer Co. (Neb.), 98 N. W. 1043; Wisconsin Sulphite Fibre Co. v. D. K. Jeffris Lumber Co., 132 Wis. 1, 111 N. W. 237.
3 Henderson v. Spratlen, 44 Colo. 278, 98 Pac. 14.
4 Colorado. Leonard v. Hallett, 57 Colo. 274, 141 Pac. 481.
Illinois. Bishop v. Busse, 69 111. 403; Kissack v. Bourke, 224 111. 352, 8 L. R. A. (N.S.) 112, 79 N. E. 619.
Indiana. Piano Mfg. Co. v. Kesler, 15 Ind. App. 110, 43 N. E. 925.
Maine. Courtenay v. Fuller, 65 Me. 156.
Massachusetts. Byington v. Simpson, 134 Mass. 145.
Pennsylvania. Malone v. Dougherty, 79 Pa. St. 46.
Vermont. Flanders v. Fay, 40 Vt. 316.
5 Madison v. Moore, 109 la. 476, 80 N. W. 527; Dreifus v. Salvage Co., 194 Pa. St 475, 75 Am. St. Rep. 704, 45 Atl. 870.
6Gemberling v. Spaulding, 104 Mich. 217, 62 N. W. 342.
7 Leonard v. Hallett, 57 Colo. 274, 141 Pac. 481.
8 Brownlee v. Lowe, 117 Ind. 420, 20 N. E. 301; Stewart v. Keteltas, 36 N. Y. 388.
9 A agreed to build a refrigerator for B. B objected to the construction of the refrigerator and A then guaranteed that it would work as built. A's promise was held to have a consideration. Thomas v. Barnes, 156 Mass. 581, 31 N. E. 683. See Sec. 550.
10 King v. Ry. Co., 61 Minn. 482, 63 N. W. 1105. For a similar principle see Stewart v. Keteltas, 36 N. Y. 388.
11 Rand v. Mather, 65 Mass. (11 Cush.) 1, 59 Am. Dec. 131; Grant v. Ry. Co., 61 Minn. 395, 63 N. W. 1026.
Contra, Ellison v. Water Co., 12 Cal. 542.