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.
The proposition that a prior contract may be modified or abrogated by a subsequent contract implies that such subsequent contract must have the elements necessary to the formation of a valid original contract. The new contract requires the assent of all the parties to the original contract or of their successors in interest to operate as a discharge thereof.1 One party cannot modify the contract unless the other assents thereto.2 A contract between A and B cannot be modified by A's declaration of his wish to avoid the contract and the promise of B's agent to try to induce B to consent thereto.3 So a contract between A and B cannot be abrogated or modified by a subsequent contract between B and C to which A does not assent.4 Thus an agreement between A and B to divide the profits to be received from the sale of certain lands cannot be modified by an agreement between B ard C whereby C agrees that B shall have any bonus which may be paid upon a particular transaction with respect to certain lands included by the contract between A and B.5 So a promise by a construction company to pay the salary of the president of a railway company will not discharge the railway company from liability to its president unless the latter assents to such new contract6 So an agreement between A, B and C cannot be modified to C's prejudice by a subsequent agreement between A and B.7 It has been held that a modification by A and B which does not increase C's liability cannot be invoked by C as a discharge of his original liability.8 So a contract between a father and his son for the support of the father cannot be modified after the father becomes insane by an agreement between the son and the other children,9 though it can of course be modified by a contract made between father and son while the father has still capacity to contract.10 If A and B have entered into a contract, for C's benefit, they may modify or abrogate such contract at any time before C has assented thereto,11 but they cannot modify it thereafter.12 To abrogate,13 or modify14 a prior contract, it is necessary that the minds of the parties to the original contract should meet by offer and acceptance upon the terms of the new contract. Thus mere negotiations, consisting of unaccepted offers cannot affect a prior contract.15 So mere statements by one party to a contract made after the contract is entered into cannot modify or abrogate it if not assented to by the adversary party.16 Thus a subsequent conversation between the parties to a written contract had immediately after signing it, whereby they discuss and construe it, does not of itself affect the contract, since the parties had no intention of modifying it by such conversation.17 So a notice by one party to a contract of a change desired or insisted on by him does not amount to a modification unless the adversary party assents thereto either expressly or impliedly. Thus a notice by an employer, to an employee, with whom he has an unexpired contract, of a reduction in the contract rate is without effect if the employee does not assent thereto.18 So a bill of lading sent to a consignee after an oral agreement for shipping goods has been entered into between himself and the carrier cannot limit the carrier's liability.19 So a contract for the sale of goods cannot be changed to a consignment or agency for sale by a provision in an invoice subsequently forwarded to the purchaser even though he does not actively dissent therefrom.20 So, A sold an elevator to B who bought for C. Subsequently B wrote to A that he did not expect to be called to pay for the elevator until C paid B. A did not dissent and thereafter put the elevator in place. It was held that A's silence did not amount to an acceptance of B's request, even if the elevator was put in after the time fixed by the original contract.21 A new contract which is intended to be executed by both parties to the original contract, and the creditors of one of such parties, does not operate as a discharge of the prior contract where not executed by such creditors.22 General authority by some promotors of a corporation to others to do whatever the latter think best abrogates a prior contract that they would retain a controlling interest in the stock of such corporation and not sell their shares without first offering them to their associates where, in order to secure the co-operation of others, without which such corporation could not be organized, it is necessary to let them have a controlling interest in such corporation.23
22 Alferitz v. Ingalls, 83 Fed. 964.
23 Lowell v. Washington County R. R., 90 Me. 80; 37 Atl. 869.
24 Lane v. Hardware Co., 121 Ala. 296; 25 So. 809.
25 Ross v. Barry, 19 Can. S. C. 360; American, etc., Co. v. Ry., 47 Fed. 343; Bray v. Loomer, 61 Conn.
456; 23 Atl. 831; Chandler v. Knott, 86 la. 113; 53 N. W. 88; Gray v. Barge, 47 Minn. 498; 50 N. W. 1014.
26 Grosse v. Sweet, 188 111. 555; 59 N. E. 432; affirming 80 111. App. 418.
27 Thayer v. Allison, 109 111. 180
1 Utley v. Donaldson, 94 U. S. 29; Brown v. Lumber Co., 117 N. C. 287; 23 S. E. 253; Dickinson v. Plow Co., 101 Wis. 157; 76 N. W. 1108.
2 Central Coal and Coke Co. v. Good, 120 Fed. 793; Oklahoma Vinegar Co. v. Carter, 116 Ga. 140; 94 Am. St. Rep. 112; 59 L. R. A. 122; 42 S. E. 378; Dickinson v. Plow Co., 101 Wis. 157; 76 N. W. 1108.
3 McCormick, etc., Co. v. Markert, 107 la. 340; 78 N. W. 33.
4 Curripr v. Kretzinger, 162 111.
511; 44 N. E. 882; McKay v. Myers, 168 Mass. 312; 47 N. E. 98; Ludlow v. Strong, 53 N. J. Eq. 326; 31 Atl. 409; Bowen v. Ry., 34 S. C. 217; 13 S. E. 421.
5 Currier v. Kretzinger, 162 111. 511; 44 N. E. 882.
6 Bowen v. Ry., 34 S. C. 217; 13 S. E. 421.
7 Ehrman v. Rosenthal, 117 Cal. 491; 49 Pac. 460.
8 Gibbons v. Grinsel, 79 Wis. 365; 48 N. W. 255.
9 Hudson v. Hudson, 90 Ga. 581; 16 S. E. 349; Hudson v. Hudson, 87 Ga. 678; 27 Am. St. Rep. 270; 13 S. E. 583.
10 Hudson v. Hudson, 90 Ga. 581; 16 S. E. 349.
11 Jordan v. Laverty, 53 N. J. L. 15; 20 Atl. 832.
12 See Sec. 1308.
13 Hamilton v. State (Miss.), 8 So. 761; Gottstein v. Lumber Co., 7 Wash. 424; 35 Pae. 133.
14Stix v. Roulston, 88 Ga. 743; 15 S. E. 826.
15 Bellamy v. Debenham, L. R. 45
Ch. D. 481: Mt. Holly, etc., Co. v. Caraleigh, etc., Works, 72 Fed. 244; 18 C. C. A. 535; Globe Refining Co. v. Guano Co., 112 Ga. 366; 37 S. E. 379; Hamilton v. State (Miss.), 8 So. 761.
16Aurora Water Co. v. Aurora, 129 Mo. 540; 31 S. W. 946; Wolff Dryer Co. v. Bigler, 192 Pa. St. 466; 43 Atl. 1092; Stacy v. Rose (Tenn. Ch. App.), 58 S. W. 1087.
17 Dean v. Mfg. Co., 177 Mass. 137; 58 N. E. 162.
18 Kendrick v. Visage, 88 Ga 275; 14 S. E. 612.