A homeowner agrees to hire a contractor to remodel their kitchen for $20,000. After work begins, the contractor requests an additional $5,000, claiming that construction costs have risen unexpectedly. The homeowner orally agrees to the increase. Later, the contractor completes the work and demands payment of $25,000. The homeowner refuses to pay the extra $5,000, arguing the modification is unenforceable. Is the contractor entitled to the additional payment?
No, because the contractor offered no new consideration to support the modification.
Yes, because unexpected cost increases make the modification enforceable.
No, because modifications to contracts must be in writing to be enforceable.
Yes, because the homeowner agreed to the modification orally.
For a modification to an existing contract to be enforceable, there must generally be new consideration provided to support the modification unless exceptions apply, such as conditions unforeseen at the time of contracting. In this case, the contractor's claim of increased costs due to rising construction expenses does not constitute new consideration because the contractor was already obligated to perform the work under the initial agreement. Therefore, the modification is unenforceable. If the homeowner had received fresh benefits from the new terms, such as an upgrade in services, the modification might be valid.
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