Question

Delightful Weddings, LLC, and Event Catering Inc. have an executory contract. They agree to rescind their contract and simultaneously enter into a new contract. If the initial contract was subject to a preexisting duty, the new contract will most likely be:
A) ​unenforceable.B) ​enforceable.C) ​valid.D) ​voidable.

Answer 1

Answer:

A) unenforceable.

Explanation:

In common law, the preexisting duty rule states that a new contract cannot be formed using an old obligation from a previous contract as consideration of the new contract. In other words, the preexisting duty must be performed before the new contract can be formed and a new consideration must be bargained between the parties involved.