Question

Lydia and Tony sign a one-year lease. Tony moves in without a hitch, pays the stipulated $400-a-month rent for four months, and lives there happily. The lease is in writing. Then Lydia learns that her rent is well below market, which would be about $500 a month. She explains the situation to Tony, and he agrees to pay $450 a month for the remainder of the lease. They shake on the deal. A few days later, Tony changes his mind. What is Tony obligated to pay?

1) Tony is obligated to pay $450 a month because the parties have modified the contract in good faith.
2) Tony is obligated to pay $450 a month because Lydia had an objectively demonstrable reason for the change in rent.
3) Tony is obligated to pay $450 a month because consideration was inadequate.
4) Tony is only obligated to pay $400 a month

Answer 1

Tony is only obligated to pay the original rent of $400 a month, as the handshake deal with Lydia for a rent increase lacks enforceable consideration, meaning the original lease's terms remain in effect.

Step-by-step explanation:

A student asked about the legal obligations of a tenant, Tony, who agreed to a rental increase but then changed his mind. Tony is only obligated to pay $400 a month because the original lease is a binding contract that cannot be altered without new consideration to support the change.

In this case, a modification to a lease agreement would require additional consideration which is not present just by increasing the rent. Lydia had a reason to raise the rent, but that does not constitute valid consideration. Tony's agreement to pay more was not supported by new consideration from Lydia; therefore, the modification is not enforceable, and the original terms stand.

Tony is obligated to pay $450 a month because the parties have modified the contract in good faith. In this case, Lydia and Tony entered into a new agreement to change the rent amount, and both parties agreed to the new terms. This modification constitutes a valid contract and Tony is legally bound to pay the new rent amount of $450 per month.