Pre-existing Duty Rule

The pre-existing duty rule is a legal concept relating to when the performance of a legal duty is classified as consideration.

Definition

Generally, performing a legal duty which is already owed does not constitute consideration, unless that duty is doubtful or honestly disputed. The traditional view is that if, in exchange for a promise, the promisee agrees to perform, or actually performs, a public duty, there is no consideration. However, the courts will find consideration if it could be shown that the promisee provided something extra, beyond the requirements of the public duty. [Contracts: Cases and Commentaries: Boyle and Percy]

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.

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.

Also, under the Uniform Commercial Code, modifications may be made free of the Common Law Pre Existing Duty Rule even without consideration. See UCC section 2-209. But the Statute of Frauds must be dealt with, so a writing is necessary if the contract as modified fits within the Statute of Frauds. For purposes of the UCC, a contract must be in writing if it is for the sale of goods over $500. Id.

References

* Rest. 2nd of Contracts, Section 73.
* UCC Section 2-209(1).