Question

Assume that Carl decides that his honor if nothing else requires him to forego the big job. Carl begins work for Hugh on July 15, but after watching the building for a week, Hugh remains nervous about having the room done in time. He tells Carl his concern. Carl says, "Hey, don't worry about it. I'll tell you what: I'll give you 100 bucks a day for every day I go past the deadline." Hugh gratefully accepts, and they shake hands. What is the validity of the 100/day clause?

1) The 100/day clause is invalid because it violates the pre-existing duty rule.
2) The 100/day clause is unenforceable because it is not in writing.
3) The 100/day clause is valid because the preexisting duty rule has been abolished.
4) The 100/day clause is valid as a side agreement

Answer 1

The validity of the 100/day clause in the agreement between Carl and Hugh depends on the specific jurisdiction and legal rules in place.

Step-by-step explanation:

The validity of the 100/day clause depends on several factors. The pre-existing duty rule generally states that a promise to do what you are already obligated to do is not legally sufficient consideration to enforce a contract. However, this rule has been abolished in some jurisdictions.

Therefore, option 3) The 100/day clause is valid because the preexisting duty rule has been abolished could be correct if the jurisdiction where Carl and Hugh made the agreement has abolished the pre-existing duty rule.

Option 4) The 100/day clause is valid as a side agreement could also be correct if the clause is considered a separate agreement from the original contract between Carl and Hugh.

Without knowing the specific jurisdiction and the exact legal rules in place, it is difficult to definitively determine the validity of the 100/day clause.