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64. If the subcontractor prevails in a suit against the general contractor, how much will the subcontractor be likely to recover?
A general contractor and a subcontractor signed a contract under which the subcontractor agreed to pour a cement foundation for a building project for $12,000. Before the subcontractor performed, it discovered that it had made an error in computing the size of the foundation and should have quoted the general contractor $18,000 for the work. The subcontractor informed the general contractor of the mistake and asked whether the general contractor would agree to pay $15,000 for the foundation, which would cover the subcontractor's costs. After determining that other subcontractors would charge at least $18,000 for the work, the general contractor agreed in writing. When the work was completed, the general contractor tendered the subcontractor $12,000. The subcontractor refused to accept the payment.
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A is incorrect. Under the pre-existing duty rule, a modification is not binding if it is not supported by consideration. However, that rule does not apply here where the modification is fair and equitable in light of changed circumstances.
B is incorrect. This answer would be correct if the subcontractor asked for relief on the basis of its mistake. However, it is not relevant, because it is the subcontractor who is seeking to enforce an agreed-upon modification.
D is incorrect. Relief based on restitution is not applicable when there is an enforceable contract. In this case, the parties had an enforceable contract, and the modification the parties made to that contract is binding. Thus, restitution does not apply.