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 an executory contract between A and B is modified by imposing a new liability upon A without releasing him from any liability, and without imposing any additional liability upon B, such promise does not contain in itself any consideration sufficient to support A's promise to assume such new liability. Unless some consideration exists outside of the mutual promises of A and B, the new contract has no consideration and is unenforceable.1 If an executory contract between A and B is modified by discharging a part of the liability which was imposed upon A by the original contract, without releasing B from any liability and without imposing any new liability upon B, such new contract is without consideration and is unenforceable.2 If disputes have arisen under a contract and the parties thereto enter into a new contract as a means of adjusting such disputes, such adjustment of disputes is a sufficient consideration.3 After a written agreement is made for the sale of land, a subsequent agreement of the vendee to repay the amount received if a certain railroad was not completed in two years, is without consideration.4 A street-car company, in order to obtain the consent of another company to use the tracks of the latter, agreed to reconstruct that part of the line which they desired to use, and equip it for use as an electric line. A subsequent agreement by which the company seeking to make use of such line. agreed, in addition to its former liability, to pay the costs incident to widening the track at the option of the other party, was without consideration.5
1 Alabama. Badders v. Davis, 88 Ate. 367, 6 So. 834; Pioneer Savings & Loan Co. v. Nonnemacher (Ala.). 30 So. 79; 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.
Arkansas. Kilgore Lumber Co. v. Thomas. 98 Ark. 219, 135 S. W. 858.
California. Carter v. Rhodes, 135 Cal. 46, 66 Pac. 985.
District of Columbia. Hughes v. Brennan Construction Co., 24 D. C. App. 90.
Iowa. Jones v. Haines. 117 Ia. 80. 90 X. W. 518; Lamb's Estate v. Morrow, 140 Ia. 89. 18 L. R. A. (N.S.) 226, 117 N. W. 1118; Richards v. Heilen, 153 Ia. 66. 133 X. W. 393.
Kentucky. Johnson v. Broughton, 183 Ky. 628. 210 S. W. 455.
Maryland. . Linz v. Schuck, 106 Md. 220, 124 Am. St. Rep. 481. 11 L. R. A. (N.S.) 789. 67 Atl. 286.
Massachusetts. Thomas v. Barnes. 156 Mass. 581, 31 X. E. 683; Pease v.
McQuillin, 180 Mass. 135, 61 N. E. 819; Hanson v. Wittenberg, 205 Mass. 319. 91 X. E. 383.
Nebraska. Bryant v. Thesing, 46 Neb. 244, 64 X. W. 967; Bowman v. Wright, 65 Neb. 661. 91 X. W. 580 [affirmed on rehearing, 65 Neb. 666, 92 X. W. 580]; Strahl v. Western Grocer Co. (Neb.), 98 X. W. 1043.
New York. Chirk v. West, 193 N. Y. 349. 86 X. E. 1.
Utah. Prye v. Kalbaugh, 34 Utah 306, 97 Pac. 331.
Washington. Long v. Pierce County, 22 Wash. 330, 61 Pac. 142; Dyer V. Irrigation District, 25 Wash. 80, 64 Pac. 1009.
Wisconsin. Brown v. Everhard, 52 Wis. 205, 8 X. W. 725; Wisconsin Sulphite Fibre Co. v. D. K. Jeffris Lumber Co., 132 Wis. 1. 1ll X. W. 237.
2 Prye v. Kalbaugh, 34 Utah 306, 97 Pac. 331.
1 Main Street, etc., Ry. Co. v. Traction Co.. 129 Cal. 301. 61 Pac. 937; Pence v. Adams, 114 Ia. 462, 89 N. W;
A modification of a prior contract which relieves A from some liability imposed by such prior contract, without imposing any liability upon A in place thereof, and without modifying B's liability in any way, is of no effect as a discharge of such prior contract.6 A promise made after a contract is entered into, to extend the time of performance, is without consideration and unenforceable.7
If the parties to a written contract fail to express their agreement in the terms thereof, and they execute a new contract to express their real intent, such contract needs no other consideration.8
If A and B have entered into a contract and B finds the performance thereof unprofitable, or for some other reason contemplates breach of such contract, B frequently promises additional compensation to induce A to perform the original contract Whether B's performance of the original contract is of itself sufficient consideration for A's promise is a question upon which there is a conflict of authority. According to the fundamental theory of consideration,9 a consideration for A's promise can exist only if A receives something in return therefor, to which he was not already entitled, or if B gives up some right in return for A's promise, to which B would otherwise have been entitled. In cases of this sort, the only thing that A receives is B's promise to perform the original contract, and A was entitled to this by reason of the original contract. The only thing which B can be said to give up is a legal power, not right, to break the original contract; and he gives this up when the new contract is made only to the extent of promising the performance which he has already promised. For these reasons it is held by a great number of authorities that no consideration exists in such cases for A's promise.10 While it is difficult to see how any other result could be reached without ignoring the theory of consideration, some authorities have managed to reach the opposite result, and to hold that A's promise in such case is supported by a valuable consideration on the theory that A gets the benefit of the performance of the original contract for which he is evidently willing to pay.11 Among the other difficulties which this theory presents is that in such cases A does not, as a rule, receive B's performance when the new contract is made, but only B's promise to perform his original contract. It is not until B has performed that A receives the performance which by this theory is the consideration for his new promise as distinct from B's promise of performance. Under this theory no consideration could exist until performance. If, however, the consideration which is contemplated by the new parties is B's promise, A's promise must be supported by a sufficient consideration when the promise is made, or else nothing which happens thereafter can furnish consideration for such promise.
1065; Combs v. Burt A Brabb Lumber Co. (Ky.), 85 S. W. 227, 27 Ky. Law Rep. 430; Mclntyre v. Mining Co., 20 Utah 323, 60 Pac. 552.
2 Brown v. Lowndes County, - Ala. - , 78 So. 815 (obiter); Creamery Package Mfg. Co. v. Russell, 84 Vt. 80. 32 L. R. A. (N.S.) 135. 78 Atl. 718.
3 Russell v. Lambert, 14 Ida. 284, L. R. A. 1015B, 20, 94 Pac. 54; Producers' Coal Co. v. Mifflin Coal Mining Co., - Va. - , 5 S. E. 948. See Sec. 612 et seq.
4 Pence v. Adams, 116 Ia. 462, 89 N. W. 1065.
5 Main St., etc., Ry. v. Traction Co., 129 Cal. 301, 61 Pac. 937.
6 Arnold v. Seharbauer, 118 Fed. 1008; Weed v. Spears, 193 X. Y. 289, 86 N. E. 10.
7 Mclntyre v. Mining Co., 20 Utah 323, 60 Pac. 552.
8 Bullock v. Johnson, 110 Ga. 486, 35 S. E. 703.