The pre-existing duty rule is an aspect of consideration within the law of contract. Originating in England the concept of consideration has been adopted by other jurisdictions, including the US. In essence, this rule declares that performance of a pre-existing duty does not amount to good consideration to support a valid contract; but there are exceptions to the rule.
The Rule
English law recognises bargains supported by consideration, not bare promises. However, only simple contracts need consideration to be enforceable; special contracts do not require consideration. Currie v Misa declares that consideration may comprise any of these positive and negative matters:
Right, Interest, Profit, Benefit
Forbearance, Detriment, Loss, or Responsibility"
The basic rule
The leading case is Stilk v Myrick, where a captain promised 8 crew the wages of 2 deserters provided the remainers completed the voyage. The shipowner refused to honour the agreement; the court deemed the 8 crew were unable to enforce the deal as they had an existing obligation to sail the ship and meet "ordinary foreseeable emergencies". However, in two cases the courts held that a claimant provides good consideration provided they act "above and beyond" their contractual obligation:
In Hartley v Ponsonby, crew who were promised a bonus after HALF the complement deserted could enforce the promise of a bonus; and
In Glasbrook Bros v Glamorgan CC , the police, who had been asked to protect a colliery from vandalism during a strike could reek recompense from the mine-owners.
Issues of "public policy"
The rule may be affected by issues of public policy, as in: Collins v Godefroy , England v Davidson and Williams v Williams
In Collins v Godefroy a subpoena'd witness to whom the defendant promised a guinea per day as "attendance money could not enforce the agreement; the witness had an existing duty to attend and it would be contrary to public policy to permit such payments. After all, one might then contemplate paying witness not to appear!
In England v Davidson a policeman was allowed to claim a reward for offering information leading to a criminal's capture; it was held to be "in the interest of justice".
In Williams v Williams, where a husband promised his estranged wife an allowance if she did not "pledge his credit", Lord Denning MR held the promise was enforceable as it was "not contrary to public policy:".
Issues of "Benefit"
The court may also enforce an agreement provided that is gives benefit:
In Ward v Byham an unmarried couple with a child separated after 5 years. The husband promised to pay the mother £1 per week provided she ensured the child was well looked after and happy. The Court held that the promise was enforceable as being in there public interest.
In Williams v Roffey a contractor subcontracted joinery work for an agreed price of £20,000.. The joiner ran out of funds and was heading for bankruptcy, so he asked the contractor for an extra amount, some of which was reluctantly paid. The job was finished on time, but the contractor refused to pay the final sum. The court held that the revised agreement was enforceable and the contractor, by promising the extra cash, had received the valuable benefit of being free of penalties and possible problems with a new subcontractor.
Practical issues
Any contracting party cannot who wished to amend the agreement must provide new consideration. This situatiation typically usually arises in any of three different ways:
Pay less
If one party has performed their part of the contract, but the other party refuses to pay unless the amount owed is reduced, the full amount remains payable: Pinnel's Case. Any attempt to use promissory estoppel will fail if the debtor behaves inequitably: D&C Builders v Rees
Pay more
One party refuses to perform her side of the contract unless a larger sum of money is paid. For example, Christine agrees to sell Julian a set of textbooks for $300. Julian wires $300 to his friend Jake, who is charged with picking up the textbooks and delivering the $300. After the money has been wired and delivery arrangements have been made, Christine calls Julian and states that she has changed the price to $350 and will not deliver the books to Jake unless Julian promises to pay an additional $50. The rule will apply so Julian could agree to pay the extra money but then not do so when the books are delivered.
Public duty
The party seeking payment already has a public duty to perform the act. For example, a government employee polygraph expert might ask a criminal about an unrelated crime during the administration of a polygraph. If the criminal admits to the crime and the employee then seeks a reward for identifying the perpetrator, he would not be entitled to it under the legal duty rule because he already has a public duty to find out about crimes.
Exceptions
The legal duty rule does not apply if the parties mutually agree to change the terms of the contract. For example, the homeowner and contractor could agree to modify their contract to include a new window for the bathroom at an additional cost of $1000. Alternatively, the parties could agree not to perform part of the contract for a $500 reduction in the price. Both modifications to the original contract would be enforceable because there was consideration for each. The legal duty rule protects one party when the other is trying to unilaterally change the terms of the agreement. There are ways around the legal duty rule, such as mutual rescission of the existing contract with a clear indication of such rescission. Also, 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 a new contract is agreed. If 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. Consideration will be found if a party promises to perform where there are unforeseen and/or unforeseeable circumstances sufficient to discharge the party from the obligation if any new or different consideration is promised, the promise is to ratify a voidable obligation, the preexisting duty is owed to another person, and there is an honest dispute as to the duty. Also, under the Uniform Commercial Code, modifications may be made free of the Common Law legal duty rule even without consideration provided that the modification is made in good faith. See UCC § 2-209. However, the Statute of Frauds must be complied with. Thus, a written contract is necessary if the contract as modified comes within the scope of that statute. For purposes of the UCC, a contract must be in writing if it is for the sale of goods where the price exceeds $500. UCC § 2-201. The pre-existing duty rule has been abrogated under the Restatement, Second of Contracts § 89, which does not require independent consideration if the parties mutually and voluntarily agree to the modification. The restatement, however, will not always be followed, as evidenced by the decision in Labriola v. Pollard Group, Inc..
The pre-existing duty rule plays a part in salvage which is a "voluntary successful service to save maritime property in danger at sea". The service must be "voluntary", which in this context means that the salvor must not have an existing duty towards the ship. Generally, a ship's crew cannot claim salvage unless they have been ordered to abandon ship, The San Demetrio ; or the crew act over and beyond their normal duty to look after the safety of the ship, The Beaver.
