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CASE 12-3
NEW ENGLAND ROCK SERVICES, INC. v. EMPIRE
PAVING, INC.
Appellate Court of Connecticut, 1999
53 Conn App. 771, 731 A.2d 784 cert. denied, 250 Conn. 921, 738 A.2d 658
http://scholar.google.com/scholar_case?
case=2815205762460431873&q=731+A.2d+784&hl=en&as_sdt=2,34
Schaller, J.
The defendants, Empire Paving, Inc. (Empire), and its bonding company, American
Insurance Company, doing business as Fireman’s Fund Insurance Company (Fireman’s
Fund), appeal from the judgment of the trial court awarding damages to the named
plaintiff, New England Rock Services, Inc. (Rock Services), under a contract between the
parties. The principal issue on appeal is whether the trial court improperly concluded that
an agreement made by the parties on December 9, 1995, modified an earlier contract
executed by them on October 26, 1995. We affirm the judgment of the trial court.
The following facts are relevant to the disposition of this appeal. On October 26, 1995,
Empire entered into a contract with Rock Services under which Rock Services would
provide drilling and blasting services as a subcontractor on the Niles Hill Road sewer
project on which Empire was the general contractor and the city of New London was the
On October 31, 1995, Rock Services commenced work on the project. From the
beginning, Rock Services experienced a number of problems with the project. The primary
obstacle was the presence of a heavy concentration of water on the site. The water problem
hindered Rock Services’ ability to complete its work as anticipated. The trial court found
that it was the custom and practice in the industry for the general contractor to control the
water on the site and that, on this particular job, Empire failed to control the water on the
site properly. In an effort to mitigate the water problem, Rock Services attempted to “load
behind the drill,” a process that allows a blaster to load the drilled hole with a charge
immediately after the hole is drilled, before water has the opportunity to seep into the hole.
modified the original agreement. The modification required Empire to pay for the blasting
work on a time and materials basis for the remainder of the project. Rock Services,
thereafter, completed its work on the project.
Upon completion of the work, Empire refused to pay Rock Services for the remaining
balance due on the time and materials agreement in the amount of $58,686.63, and Rock
Services instituted this action. The trial court concluded that the later purchase order was a
valid and enforceable modification of the earlier contract. The trial court found that the
parties intended the purchase order to modify the earlier agreement and that Empire’s
assent to the modification was not made under duress but, rather, was a calculated business
* * *
In concluding that the modification was valid and enforceable, the trial court
determined that the later agreement was supported by sufficient consideration. * * *
“The doctrine of consideration is fundamental in the law of contracts, the general rule
being that in the absence of consideration an executory promise is unenforceable.”
[Citation.] While mutual promises may be sufficient consideration to bind parties to a
modification; [citations] a promise to do that which one is already bound by his
contract to do is not sufficient consideration to support an additional promise by the
other party to the contract. [Citations.]”
“A modification of an agreement must be supported by valid consideration and requires
a party to do, or promise to do, something further than, or different from, that which he
is already bound to do. [Citations.] It is an accepted principle of law in this state that
when a party agrees to perform an obligation for another to whom that obligation is
Our Supreme Court in [citation], however, articulated an exception to the preexisting
duty rule: “‘[W]here a contract must be performed under burdensome conditions not
anticipated, and not within the contemplation of the parties at the time when the contract
was made, and the promisee measures up to the right standard of honesty and fair dealing,
and agrees, in view of the changed conditions, to pay what is then reasonable, just, and fair,
such new contract is not without consideration within the meaning of that term, either in
law or in equity.’” * * * “‘What unforeseen difficulties and burdens will make a party’s
refusal to go forward with his contract equitable, so as to take the case out of the general
rule and bring it within the exception, must depend upon the facts of each particular case.
They must be substantial, unforeseen, and not within the contemplation of the parties when
the contract was made. They need not be such as would legally justify the party in his
refusal to perform his contract, unless promised extra pay, or to justify a court of equity in
Empire argues strenuously that the water conditions on the site cannot qualify as a new
circumstance that was not anticipated at the time the original contract was signed. * * *
Empire’s argument, however, is misplaced. Rock Services does not argue that it was
unaware of the water conditions on the site but, rather, that Empire’s failure to control or
* * *
The judgment is affirmed.
*** Chapter Outcome ***
Explain the concept of bargained-for exchange and whether this element is present
with past consideration or third-party beneciaries.
B. BARGAINED-FOR EXCHANGE
A bargained-for exchange requires a mutually agreed upon exchange of
consideration.
Past Consideration
Past consideration is an act done before the contract is made. The element
of exchange is missing where a promise is given for an act already done.
Past consideration is no consideration.
Third Parties
Consideration to support a promise may be given to a person other than the
promisor if the promisor bargains for that exchange. Conversely,
consideration may be given by some person other than the promisee.
*** Chapter Outcome ***
Identify and discuss those contracts that are enforceable even though
they are not supported by consideration.
C. CONTRACTS WITHOUT CONSIDERATION
Certain promises are enforceable even though they are not supported by
consideration.
Promises to Perform Prior Unenforceable Obligations
The courts will sometimes enforce a new promise that originally was not
enforceable or has become unenforceable.
Promise To Pay Debts Barred By The Statute Of Limitations — The
statute of limitations provides a time limit on bringing a legal action, but
the debtor can become liable again for an expired debt by freely admitting
NOTE: See Chapter 39: Bankruptcy.
Voidable Promises — A new promise to fulll a previous voidable (but not
avoided) promise may be enforced, as long as the new promise is not
voidable.
Moral Obligations — Under common law, promises to pay these are not
enforceable. The Restatement imposes an obligation on promisors "to the
extent necessary to prevent injustice" and provides for enforcement of a
promise to pay for a benet already received by mistake.
Promissory Estoppel
Sometimes noncontractual promises are enforced under the doctrine of
promissory estoppel where one party has relied, to her detriment, on the
promise made by another party.
CASE 12-4
DILORENZO v. VALVE AND PRIMER CORPORATION
Reid, J.
[DiLorenzo, a forty-year employee of Valve & Primer, was also an officer, director, and
shareholder of one hundred shares of stock. DiLorenzo claims that in 1987 Valve & Primer
offered him a ten-year stock option that would allow DiLorenzo to purchase an additional
three hundred shares at the fixed price of $250 per share. DiLorenzo claims that in reliance
on that employment agreement, he stayed in his job for over nine additional years and did
not follow up on any of several recruitment offers from other companies. Valve & Primer
claims the 1987 employment agreement between it and DiLorenzo did not contain a stock
purchase agreement. The only purported proof of the agreement is an unsigned copy of
board meeting minutes of which DiLorenzo had the only copy.
In January 1996, DiLorenzo entered into a semiretirement agreement with Valve &
Primer, and he attempted to tender his remaining one hundred shares pursuant to a stock
redemption agreement. Shortly thereafter, Valve & Primer fired DiLorenzo. DiLorenzo
argued before the trial court that, even if the purported agreement was not found to be
valid, it should be enforced on promissory estoppel grounds. Valve & Primer’s moved for
“A contract, to be valid, must contain offer, acceptance, and consideration; to be
enforceable, the agreement must also be sufficiently definite so that its terms are
reasonably certain and able to be determined.” [Citation.] “A contract is sufficiently
definite and certain to be enforceable if the court is able from its terms and provisions to
ascertain what the parties intended, under proper rules of construction and applicable
principles of equity.” [Citation.] “A contract may be enforced even though some contract
terms may be missing or left to be agreed upon, but if essential terms are so uncertain that
there is no basis for deciding whether the agreement has been kept or broken, there is no
contract.” [Citation.] A bonus promised to induce an employee to continue his employment
is supported by adequate consideration if the employee is not already bound by contract to
continue. [Citation.] Because we are assuming the validity of the document issuing the
stock options, we now turn to whether the underlying option is supported by valid
consideration so as to make it a proper contract.
“Consideration is defined as the bargained-for exchange of promises or performances
and may consist of a promise, an act or a forbearance.” [Citation.]
“The general principles applicable to option contracts have been long established. An
option contract has two elements, an offer to do something, or to forbear, which does
not become a contract until accepted; and an agreement to leave the offer open for a
specified time [citation], or for a reasonable time [citation]. An option contract must be
undertaken by the other’ [citation]; or otherwise stated, ‘Any act or promise which is of
benefit to one party or disadvantage to the other * * *.’" [Citation.]
“The preexisting duty rule provides that where a party does what it is already legally
obligated to do, there is no consideration because there has been no detriment.” [Citation.]
Focusing on the lack of a detriment to the employee, the trial court found no valid
consideration. Based upon our view of the discussion in [citation], the trial court was
correct in concluding that the option contract is merely an offer which may be withdrawn
* * *
We next address DiLorenzo’s claim that he is entitled to the value of the shares of stock
based upon the theory of promissory estoppel. DiLorenzo argues that the trial court
misapplied the law in finding that there was insufficient reliance to support a claim for
promissory estoppel. He claims that, once the trial court decided there was insufficient
consideration to support the option contract, promissory estoppel should have been applied
Valve & Primer responds that the trial court was correct in finding insufficient reliance
to support the promissory estoppel claim. Valve & Primer argues that the DiLorenzo could
not satisfy the detrimental reliance prong of the promissory estoppel elements. Though
DiLorenzo claimed he did not act upon offers of employment he claims were made by other
companies during the course of his employment with Valve & Primer, he presented to the
trial court nothing but his own testimony in support of his claim. Valve & Primer argues
that, since DiLorenzo essentially is claiming his stock option vested immediately, he cannot
contend that he detrimentally relied upon the purported agreement in the corporate minutes
by turning down those other opportunities. * * * For purposes of promissory estoppel, if
DiLorenzo’s allegations are taken as true, and the purported option vested immediately, it
required nothing of him in order to be exercised other than the payment of $250 per share.
“Promissory estoppel arises when (1) an unambiguous promise was made, (2) the
Affirmed.
Promises Made Under Seal
Under the common law, a promise under seal was binding without
consideration. In some states a promise under seal is still binding. Most
states, however, have created laws which remove the distinction between
contracts under seal and written, unsealed contracts.
Promises Made Enforceable by Statute
Some gratuitous promises that otherwise would be unenforceable have
been made binding by statute. Most signicant among these are certain
promises that are made enforceable by the Uniform Commercial Code,
including:
