Adam and Bob entered into a written contract in which Adam agreed to deliver 100 units of a specific product to Bob for $10,000. After entering into the contract, Adam realized that the costs of obtaining the product had increased due to an unforeseen supply chain issue. Adam asked Bob to agree to pay $12,000 instead of $10,000. Bob orally agreed to the price increase. Adam delivered the 100 units, but Bob refused to pay the $12,000 and instead tendered $10,000. If Adam sues Bob for the additional $2,000, which of the following BEST explains the legal outcome?
The modification is enforceable because the increased price reflects a reasonable adjustment due to unexpected circumstances.
The modification is unenforceable because contract modifications must always be in writing under the Statute of Frauds.
The modification is unenforceable because under common law, a modification must be supported by new consideration.
The modification is enforceable because Bob orally agreed to the new terms before Adam delivered the goods.
The enforceability of a contract modification depends on whether the modification is supported by adequate consideration. Generally, under common law, a modification is unenforceable unless new consideration is provided. Here, Adam’s additional demand for $12,000 was not accompanied by consideration since Adam was merely performing his pre-existing duty to deliver the 100 units. The oral agreement would fail for lack of consideration. Under the UCC (Uniform Commercial Code), however, modifications may be enforceable without consideration as long as they are made in good faith, and the facts do not indicate a lack of good faith by Adam. The correct answer is based on the law that most applies here, which distinguishes common law from the UCC. Other answers are incorrect because they overlook the necessity of consideration under common law or fail to identify the correct facts or legal rules.
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