Brief Fact Summary.
The Plaintiff, a contractor, sued the Defendant, a subcontractor, alleging that Defendant had breached a contract under which he had promised to perform all of the excavation work for a post office the Plaintiff was constructing. The Defendant counterclaimed.
Synopsis of Rule of Law.
When a party agrees to perform an obligation for another to whom that obligation is already owed, the second agreement does not constitute a valid, enforceable contract. Where, however, the subsequent agreement imposes upon the one seeking greater compensation an additional obligation or burden not previously assumed, the agreement, supported by consideration, is valid and binding upon the parties.
However, where a contract must be performed under burdensome conditions not anticipated, and not within the contemplation of the parties at the time the contract was made, and the promisee measures up to the right standard of honesty and fair dealing, and agrees, in view of the changed conditions, to pay what is then reasonable, just, and fair, such new contract is not without consideration within the meaning of that term, either in law or in equity.View Full Point of Law
The Defendant signed a subcontract with the Plaintiff under which he promised to perform “all Excavation, Grading, Site Work, etc.” After commencing excavation, the Defendant discovered considerable debris below the surface that neither he nor Plaintiff had been aware of, necessitating much more work than contemplated. Under the contract and subcontract, no extra work could be performed without authorization, which could not be obtained.
The Defendant ceased working, and Plaintiff entered into an oral agreement with the Defendant that he would pay for his costs of removing the unanticipated rubble, plus 10%. The Plaintiff put the terms into writing and signed, but the Defendant never signed and returned the letter. The Defendant did return to work for a while, and then left the job unfinished. The Plaintiff completed his own contract with the owner, and suffered considerable damages.
Did the oral agreement between the parties constitute a valid agreement obligating the Defendant to remove the unexpected rubble?
Yes. Remanded with direction to render judgment for the Plaintiff to recover such damages as he may prove on a new trial limited to the issue of damages.
· The lower court found that the parties entered into a new agreement pertaining to the costs for removal of the rubble. The agreement was valid, as it pertained to an unforeseen condition involving new work by the Defendant and additional compensation paid by the Plaintiff.
The subsequent oral agreement was enforceable, as it involved a condition unforeseen by either party under the original contract, additional work and additional compensation.