9. If the contractor sues the owner on account of the «extras,» which, if any, of the following will effectively support the owner's defense?

Provisions in agreements that prevent non-written changes are called no-oral modification clauses. No-oral modification clauses are meant to hold parties to the terms of the written agreement. A party may, however, through words or conduct, rely on verbal modification and essentially waive the no-oral modification clause. No-oral modification clauses would not necessarily prevent a verbal modification of a written agreement through conduct that effectively evidences the parties' mutual agreement to ignore the effect of the clause.

D is correct. Here, the contractor and owner included a provision to limit departures of the specifications of the written agreement unless these departures, or «extras,» were in writing and signed by both parties. The facts show that during the construction project the owner orally requested extras, and orally agreed to prices. The contractor, in turn, relied on the owner's conduct and words and incorporated these extras as requested by the owner. The owner's actions and the contractor's reliance are evidence of the parties' mutual agreement to ignore the effect of the no-oral modification clause.

A is incorrect. The parol evidence rule limits the extent to which parties may introduce evidence of a prior or contemporaneous agreement in order to modify, explain, or supplement the contract at issue. The rule excludes the admission of an antecedent agreement. When the parties to a contract have made and signed a completely integrated written contract, evidence of previous negotiations will be inadmissible for the purpose of supplementing or contradicting what is written into the contract. The parol evidence rule, however, does not bar evidence of subsequent agreements. In this case, the parties agreed to include extras (not mentioned in the written agreement) subsequent to the execution of the writing. The facts state that «during construction, the contractor incorporated into the structure overhanging gargoyles and other ‘extras' orally requested by the owner for orally agreed prices in addition to the contract price.» This agreement was entered into after the written agreement, and because the parol evidence rule only bars previous or contemporaneous agreements that contradict or supplement the written agreement, the parol evidence rule does not apply.

B is incorrect. Consideration that makes contracts enforceable must be «bargained for.» The pre-existing duty rule states that consideration cannot consist of performance that the party had a pre-existing duty to perform. If a party was legally required to act or refrain from acting, then agreeing to do that very thing is not new consideration that needs to have been «bargained for» by the other party. Essentially, the pre-existing duty rule maintains the integrity of a contract by preventing a party from using leverage to coerce another party into contract modifications. Some exceptions to the rule include when one party acts after relying on another party's modification of a contract. Another exception to the rule is when unanticipated circumstances arise, leading the parties to agree upon a reasonable contract modification.

In this case, the call of the question asks for a defense based solely on the ground that no written, signed authorization for «extras» was ever effected. This answer choice may sound like a good answer but it is incorrect because it is not addressing a defense based on a lack of written and signed authorization.

C is incorrect. Express conditions are conditions that are explicitly stated in the contract. There are two types of express conditions: condition precedent and condition subsequent. A condition precedent is a condition that must be met before the performing party has a duty to perform. Then, once the condition is met, the duty to perform is triggered. A condition subsequent is a condition that arises after the duty to perform has begun and, if satisfied, releases the performing party from his duty to perform. Moreover, a party can waive his right to the fulfillment of conditions on which the duty of performance hinges.

Here, there was no express condition. Further, even if an express condition argument were to be made, parties may waive conditions through their conduct. As discussed above, the owner's actions and the contractor's reliance, acted as a waiver of the written clause.