WPI 301.07 Contract Modification

Use this instruction when there is a jury issue of contract modification. If, under the circumstances, the court determines that consideration is required for a claimed contract modification, and that there is a factual issue regarding such consideration, this instruction should be modified accordingly. See the Comment below. It may also be necessary to use WPI 301.04 (Consideration), which incorporates the court's determination of what constitutes consideration.

Use the bracketed words as appropriate to the type of evidence of modification that is offered.

Overview. This instruction is used when a party alleges that an existing contract was later modified by the parties, and the evidence presented is sufficient to submit the issue to the jury.

A claim that a contract was later modified by the parties should not be confused with the issues presented when one or both of the parties acknowledge that only one contract exists, but the parties disagree about the intent of certain terms within the contract. When the issue is intent rather than modification, WPI 301.06 (Parol Evidence) is used rather than WPI 301.07.

Claim of modification, burden of proof. It is often said that “[m]utual modification of a contract by subsequent agreement arises out of the intentions of the parties and requires a meeting of the minds.” Ebling v. Gove's Cove, Inc., 34 Wn.App. 495, 499, 663 P.2d 132 (1983); see also Wagner v. Wagner, 95 Wn.2d 94, 621 P.2d 1279 (1980) (no modification of separation agreement); Tondevold v. Blaine Sch. Dist. No. 503, 91 Wn.2d 632, 590 P.2d 1268 (1979) (attempt by employer to reinstate contract provision deleted by mutual agreement was void and of no effect); MacDonald v. Hayner, 43 Wn.App. 81, 715 P.2d 519 (1986) (promise to renegotiate payment for services did not constitute promise to modify payment).

According to older cases, an oral modification of a written contract must be shown by clear and convincing evidence. See Tonseth v. Serwold, 22 Wn.2d 629, 644, 157 P.2d 333 (1945); Dinsmore Sawmill Co. v. Falls City Lumber Co., 70 Wash. 42, 44, 126 P. 72 (1912); see generally 17B C.J.S. Contracts § 755 (1999). Modern authority from elsewhere is divided.

Some states continue to require clear and convincing evidence. See, e.g., Sokol & Assocs., Inc. v. Techsonic Indus., Inc., 495 F.3d 605 (8th Cir. 2007) (under Minnesota law, a party asserting the parol modification of a written contract has the burden of proving the modification by clear and convincing evidence). Others require only a preponderance of the evidence to establish contract modification. See, e.g., Barrett v. Bank of Am., 183 Cal.App.3d 1362, 229 Cal.Rptr. 16 (Cal. Ct. App. 1986) (trial court erred in requiring clear and convincing evidence).

Consideration. Generally, a modification requires consideration, or a mutual change in obligations and rights. Wagner, 95 Wn.2d 94; Rosellini v. Banchero, 83 Wn.2d 268, 517 P.2d 955 (1974); Dragt v. Dragt/DeTray, LLC, 139 Wn.App. 560, 576, 161 P.3d 473 (2007); Ebling, 34 Wn.App. at 499. While consideration may be “any bargained for act or forbearance,” Dragt, 139 Wn.App. at 572, it must be something separate from what was promised in the original contract. Dragt, 139 Wn.App. at 560 (trial court erred in enforcing contract modification where separate consideration was not shown).

Depending on the facts and which issues are disputed, it may be possible for counsel to argue that the agreement to a new contract replacing the old contract is, itself, sufficient consideration to support the formation of the new contract. DeWolf, Allen, & Caruso, 25 Washington Practice, Contract Law and Practice § 11.3 (3d ed.), and authorities cited therein.

Cross-reference. The foregoing is only a brief summary of the substantive law underlying WPI 301.07. For a detailed analysis of the law, see DeWolf, Allen, & Caruso, 25 Washington Practice, Contract Law and Practice ch. 11 (3d ed.).

Effect of parol evidence rule. As mentioned above, the parol evidence rule (see WPI 301.06) comes into play when one or both parties agree that only one contract exists, but the parties disagree on the intent of that contract. The parol evidence rule does not restrict proof that the parties later formed a new contract, even if the new contract is inconsistent with the first contract. DeWolf, Allen, & Caruso, 25 Washington Practice, Contract Law and Practice § 4.6 (3d ed.).

As a result, the parol evidence rule would normally not apply in a case in which the issue is whether the parties formed a new contract to replace a previous contract. The parol evidence rule would become applicable only if both parties agree that a new contract was formed, but disagree on the intent of certain terms in the new contract.

For a more detailed discussion of the parol evidence rule, see the Comment to WPI 301.06.