Question

X and Y have a contract which obligated X to sell Y 100 boxes of screws for $100. The parties orally modify the contract so that X will sell Y the same 100 boxes of screws for $125. The second agreement is:

a. Enforceable as it's a modification of an existing contract.
b. Void for lack of consideration.
c. Enforceable because of the oral agreement.

Answer 1

The enforceability of contract modifications such as an oral agreement to change the contractual price from $100 to $125 for goods depends on the good faith of the parties involved and the applicability of the UCC, which may permit such modifications without additional consideration. The correct option is a.

Step-by-step explanation:

The question pertains to the enforceability of contract modifications without additional consideration, specifically in the context of an oral agreement to change the price of goods already under a contract. Under general contract law, a modification of a contract must typically be supported by additional consideration to be enforceable. However, the Uniform Commercial Code (UCC), which governs sales of goods, provides that an agreement modifying a contract within its scope needs no consideration to be valid (UCC § 2-209). Yet, for the modification to be enforceable, it must meet the good faith standard and cannot be the result of coercion or fraud. Therefore, if the modification was made in good faith, the oral agreement to sell the 100 boxes of screws at a higher price could potentially be enforceable, though it may face issues of proof without written confirmation. In contrast, if the higher price is being demanded due to coerced or fraudulent circumstances, that could render the modification unenforceable. Moreover, it's important to note that certain contracts falling under the Statute of Frauds may require a written amendment to be enforceable.