Contracts > Contracts Keyed to Knapp > Justification For Nonperformance: Mistake, Changed Circumstances, And Contractual Modifications
Alaska Packers’ Assoc. v. Domenico
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Brief Fact Summary.
This case involves a contract modification to a services contract where the workers demanded increased compensation to perform the same duties as specified in the original contract.
Synopsis of Rule of Law.
When one is contractually obligated to perform certain duties, a demand for increased compensation to perform these same duties is not supported by sufficient consideration.
The Plaintiffs , Domenico and other fisherman (Plaintiffs), entered into a contract with the Respondent, Alaska Packers’ Association (Respondent), to travel on a fishing vessel to Alaska and then work during the fishing season of 1900. The contract was entered into in San Francisco, prior to the men’s departure for Alaska. The terms stated that Respondent was to pay each Plaintiff $50 for the fishing season and an additional two cents for each red salmon he helped catch. Certain workers entered into a second contract modifying the payment of $50 for fishing season to $60. Once they arrived in Alaska, the Plaintiffs stopped work and demanded a $100 for operating the vessel to and from Alaska, instead of the $50 or $60 stated in the original contract. They threatened to return to San Francisco if this demand was not met. Because Respondent could not find replacement workers, the superintendent of Alaska Packers entered into new contracts with Plaintiffs, conceding to their deman
ds. However, the superintendent told the Plaintiffs that he had no authority to make such a contract. On their return to San Francisco, Plaintiffs demanded payment in accordance with the terms of the new contract.
Is a contract modification, which seeks to increase wages to be paid for the same duties as stated in the original contract, valid?
No. Judgment reversed. This Court found that a demand for increased wages where there is a pre-existing duty to perform certain obligations, is not supported by consideration.
The court found that the Plaintiffs were already obligated by contract to perform their duties. These duties had not changed in anyway, as the original contract stated that they were to travel by vessel to Alaska. Therefore, no consideration existed to support Plaintiffs’ demand for increased wages. (The lower court had rejected the Plaintiffs’ argument that the fishing nets were rotted, entitling them to increased wages.) The court also reasoned that allowing such a modification would encourage men to abandon their contractual obligations in bad faith.