Question

Please explain the following statement.

Assume that a contract for the sale of goods is modified. New consideration need not to present for the modification to be binding if the transaction is governed by the UCC.

Answer 1

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The above statement means that we modify a contract then we need not specify any new consideration if the transaction is under UCC( Uniform Commercial Code).

Here, we know that there are some essentials of contract in order to bind it legally with UCC. Some of them are proposal, acceptance and consideration. Moreover, one must not be disqualified from entering into contact with anyone.

So when we get into contact with anyone, we mutually agree with the terms and conditions which includes the amount of consideration also. So, if we modify the terms of the contract, and we do not modify consideration, that means, we do not include any new consideration, then it is implied that we would perform the contract with the original consideration without any modifications. As original consideration was decided mutual agreement and mutual willingness, if we do not select or decide any new consideration, the contract will still be legal under UCC, and both the parties will be bound to perform the contract with the old consideration.

For example, if furniture seller agreed to deliver the furniture to his customer on Monday, and he charged $5000 for furniture, then if due to some reason he is unable to deliver the furniture on Monday and delivers it on Tuesday, then there is no new consideration, the contract would still be held valid.