Under The Uniform Commercial Code An Agreement Modifying A Contract
If the contract is not intended for the sale of goods to or by a trader, additional consideration is required to amend the terms of the contract. For example, Marge entered into a contract to sell her car to Paul. Both want to change some of the contractual conditions. Since the PEA does not apply to the sale of a car between private parties, some new consideration must be exchanged before the contract can be amended. A service contract is covered by customary law; Therefore, both parties to a service contract typically need new consideration to amend the contract. Take this example: a university`s activity committee partners with a famous comedian to put on a show when he gets home for $5,000. The comedian will then call the activity committee to ask for $7,000 instead of $5,000. The members of the activity committee cannot modify the contract in this way, so they negotiate with the comedian. They tell him they will be able to change the contract if he agrees to sign autographs an hour after the show.
Both parties agree with the new contractual conditions. This is a valid change since the two parties exchanged new thoughts: US$2,000 from the activity committee and the signing of autographs by the comedian. If the contract is for a sale of goods (i.e., movable property) in a commercial environment, New Mexico Uniform Commercial (UCC) must be applied. The New Mexico UCC is available under paragraphs 55-1-101 to -725 of the NMSA. Generally speaking, the CSA applies to the sale of products in which a trader has an interest. The examples below illustrate the date of entry into force of the CSD for a sales contract. In the event of a modification of a contract for the sale of goods, the contracting parties must comply with the Single Commercial Code. The UZK regulates transactions relating to the sale of goods. The CSD seeks to expedite the nature of the trade and therefore does not require the parties to provide new consideration for the amendment of a contract for the sale of goods.
However, the CSD requires the parties to amend the contract in good faith. Under customary law, a contracting party needs further reflection – something of legal value – to amend a contract. The party receives new consideration by negotiating with the other party to change the consideration on both sides of the contract. Two exceptions to the general rule apply. If the parties encounter unforeseen difficulties or if one of the parties changes its position by relying on the modified promise, the parties do not need further reflection to legally modify the contract. 1. An agreement which amends a contract in this Article shall not be necessary to be binding. In some cases, the CSCE`s approach to sales contracts differs from the treatment of contracts that are not favourable to the sale of goods. For example, the conditions for amending a contract after the PEI are different (see below) and the limitation period for contracts for the sale of goods is shorter than for other contracts (see discussion above on the elements of a contract). . . .