Pre Existing Duty Rule
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The pre-existing duty rule is a legal concept relating to when the performance of a legal duty is classified as consideration.
[edit] Definition
Generally, performing a legal duty which is already owed does not constitute consideration, unless that duty is doubtful or honestly disputed.
In some states, parties may renegotiate contracts to include additional benefits if, for example, the party performs unexpected or additional duties, the parties assent in good faith, or the new contract is written. A new promise by the parties to an existing contract constitutes a mutual recission of the existing contract and the formation of a new one.
[edit] Exception
Where contractual parties owe each other existing contractual obligations, but a third party offers a promise contingent upon performance of the contract, that promise has sufficient consideration.
[edit] References
- Rest. 2nd of Contracts, Section 73.
- UCC Section 2-209(1).
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