Multiple choice

If a contract creates a duty, it can be the basis of consideration in a different contract.

  1. TRUE

  2. FALSE

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Under the pre-existing duty rule, a duty that is already owed under an existing contract cannot serve as valid consideration for a new, separate contract with the same or a different party. To form a new contract, there must be new, independent consideration. Therefore, an existing contractual duty cannot simply be recycled to support a new agreement.