Theory of pre-existing duty

Definition

The theory of pre-existing duty states that if a party is already legally obligated to perform a certain duty, then they cannot claim that performance of that duty constitutes valid consideration for a new contract. This principle is crucial in understanding the adequacy and sufficiency of consideration, as it helps to determine when promises are enforceable based on whether the performance of a duty was already required by law or an existing agreement.

5 Must Know Facts For Your Next Test

1. The theory of pre-existing duty emphasizes that merely fulfilling an existing obligation does not count as new consideration for a new agreement.
2. Exceptions exist where new consideration might arise from unforeseen circumstances or additional benefits provided beyond the original duty.
3. In some jurisdictions, if one party agrees to perform a pre-existing duty for additional compensation, that agreement can sometimes be enforceable if it meets certain conditions.
4. The purpose of this theory is to prevent coercion and ensure fairness in contractual agreements by not allowing parties to take advantage of existing obligations.
5. Judicial decisions often refer to this theory to evaluate the validity of modifications to contracts and assess whether they are supported by sufficient consideration.

Review Questions

• How does the theory of pre-existing duty affect the evaluation of consideration in contract law?
  • The theory of pre-existing duty directly impacts the evaluation of consideration by establishing that a party's performance of an existing obligation cannot serve as valid consideration for a new contract. This means that if someone is already required to do something, promising to do it again or fulfill that duty cannot support a new agreement. This principle helps ensure that each party brings something new to the table in any contractual arrangement, thereby enhancing fairness.
• Discuss the implications of the theory of pre-existing duty on contract modifications and how they might be treated by courts.
  • The theory of pre-existing duty has significant implications for contract modifications, as courts typically require new consideration for any changes made to existing contracts. Without sufficient new consideration, modifications may be deemed unenforceable. However, if parties can demonstrate that additional benefits or unforeseen circumstances justify the changes, courts may still uphold the modified agreement despite the existence of a pre-existing duty.
• Evaluate how exceptions to the theory of pre-existing duty can influence negotiations between contracting parties.
  • Exceptions to the theory of pre-existing duty can greatly influence negotiations by creating opportunities for parties to renegotiate terms without falling into legal pitfalls. When parties recognize that additional benefits or unforeseen circumstances can serve as new consideration, they may feel empowered to seek changes that better suit their needs. This flexibility can lead to more cooperative negotiations and potentially result in contracts that reflect evolving circumstances rather than rigid obligations, ultimately fostering better business relationships.

Related terms

Consideration:

The value or benefit that is exchanged between parties in a contract, which is necessary for the contract to be enforceable.

Contract Modification: The process of changing the terms of an existing contract, which often requires new consideration to be valid.

Promise: A declaration or assurance that one will do something or that a particular thing will happen, which can form the basis of a contract.