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 formality with which a new contract modifying or abrogating an earlier contract must be executed, or the kind of evidence by which it must be proved, depends in part upon the formality with which the original contract is executed, or the evidence whereby it must be proved. At Modern Law a contract of record such as a judgment may be discharged by a subsequent contract taken in satisfaction thereof.1 At Common Law, if the original contract was under seal, it could not, before breach, be modified by a subsequent executory agreement not under seal.2 This view is still entertained in some jurisdictions in the United States.3 Such a contract may be abrogated by a subsequent contract not under seal which has been fully performed.4 If the subsequent contract not under seal has been so far carried out that the parties cannot be restored to their position before entering into it, the original contract under seal is thereby abrogated or modified.5 In equity a contract under seal might be discharged or modified by a subsequent oral contract not under seal. Thus the time for the performance of a contract under seal may be extended by a subsequent oral contract.6 Where law and equity are both administered by the same court and often in the same action, the equity rule permitting the discharge of contracts under seal by subsequent oral executory contracts has been extended to actions at law.7 A leased a store building to B by a written lease of ten years, at forty-five hundred dollars a year. After the first year, A and B made an oral agreement that the rent was to be reduced to thirty-five hundred dollars for three years. B paid his rent at that rate, and A gave receipts in full. It was held that the oral agreement was of no effect if A chose to avoid it, but that as to the time for which he had received such rent, and given receipts in full, the agreement was binding, and A could not subsequently recover the difference between the original rental and that fixed by the new agreement.8 If a sealed contract contains a provision that no part of such contract shall be sub-let, such provision may subsequently be waived orally.9 If a contract under seal has been entered into, the parties thereto may enter into a subsequent oral contract upon a different subject-matter collateral to the original sealed contract, and such new contract will be valid. Thus A and B entered into sealed contract, whereby A conveyed his interest in partnership property to B. It was subsequently discovered that certain property had been omitted from such instrument. A subsequent oral contract between A and B conveying such omitted property is valid.10
6 Main St., etc., Ry. v. Traction Co., 129 Cal. 301; 61 Pac. 937.
7 Arnold v. Scharbauer, 118 Fed. 1008.
8 Mclntyre v. Mining Co., 20 Utah 323; 60 Pac. 552.
9 Bullock v. Johnson, 110 Ga. 486; 35 S. E. 703.
10 Rumely v. Emmons, 85 Mich. 511; 48 N. W. 636.
11 Rumely v. Emmons, 85 Mich 511; 48 N. W. 636.
1 German Bank v. Iron Works, -la. - ; 99 N. W. 174.
2 Countess of Rutland's Case, Coke, Pt. V. 25b; Spence v. Hea-ley, 8 Exch. 668.
3 Tischler v. Kurtz, 35 Fla. 323; 17 So. 661; West Chicago Street Ry. v. Morrison, etc., Co., 160 111. 288; 43 N. E. 393.
4 McClay v. Gluck, 41 Minn. 193; 42 N. W. 875; McCreery v. Day, 119 N. Y. 1; 16 Am. St. Rep. 793; 6 L. R. A. 503; 23 N. E. 198; Bon-saek Machine Co. v. Woodrum, 88 Va. 512; 13 S. E. 994.
5 Arbogast v. Mylius, - W. Va. - ; 46 S. E. 809.
6 Von Syckel v. O'Hearn, 50 N. J. Eq. 173; 24 Atl. 1024; Bigelow v. Rommelt, 24 N. J. Eq. 115; Tompkins v. Tompkins, 21 N. J. Eq. 338.
7 Thus in speaking of the Common-Law rule the court said: "The application of this rule often produced great inconvenience and injustice, and the rule itself has been overlaid with distinctions invented by the judges of the Common-Law courts to escape or mitigate its rigor in particular cases. But .in equity the form of the new agreement is not regarded, and under the recent blending of the jurisdictions of law and equity, and the right given by the modern rules of procedure in this country and in England to interpose equitable defenses in legal actions, the Common-Law rule has lost much of its former importance. . . . It is a necessary consequence of our changed system of procedure that whatever formerly would have constituted a good ground in equity for restraining the enforcement of a covenant or decreeing its discharge, will now constitute a good equitable defense in an action on the covenant itself." McCreery v. Day, 119 N. Y. 1, 7; 16 Am. St. Rep. 793; 6 L. R. A. 503; 23 N. E. 198.