Source: http://missouri-k.com/?cat=1&paged=2
Timestamp: 2019-04-18 14:24:31+00:00

Document:
Pre-Existing Duty Rule and Agent’s Obligations–PDI Group, Inc. v. The Desco Group, Inc.
The case involves a construction contract requiring the contractor to do work involving installation of a plumbing system for particular premises. The contractor allegedly in part used existing ABS pipe in lieu of installing scheduled PVC pipe, with bad results following. The defendant, allegedly in the capacity of the agent of the property owner, had discussions with the contractor, following which some additional plumbing work was done.
The pertinent questions include, among others: whether no enforceable contract could have been formed, because the contractor was under a pre-existing duty to a third party (relationship not adequately clarified in the brief) to have done that work and whether the defendant could be liable, because it alleges it purported to act as agent for the property owner.
The case involves an alleged pre-existing duty owed by contract to a third party. The benefit of the pre-existing duty rule is it affords a basis for a court to negate a determination there is an enforceable amendment to a contract in certain contexts where it would appear there was not voluntary assent. Of course, the principle is couched in terms of consideration, but its real benefit is it allows revisiting of the ordinary principles of what is assent (and what is not duress) in a context where factors indicate there was not voluntary assent.
That the duty is owed to a third party raises additional complexities. It may well be that, where the duty is owed to a third party, the arrangement was, in fact, voluntary–that the concerns underlying the principle are not present. See generally Restatement (Second) of Contracts § 73, cmt. d.
Calamari & Perillo § 4.9(d) (5th ed. 2003) indicates “the weight of the modern authority” would allow the arrangement to be enforceable–that a pre-existing contractual duty to a third party does not eliminate consideration.
Of course, the fact that a majority of jurisdictions reaches a particular result does not mean that’s the intelligent answer. I am something of a fan of the pre-existing duty rule, at least relative to what I gather to be the typical modern approach. But, were I seeking to support the defendant’s position in this regard, I would want to see a greater development of the pertinent facts, and the relationship with the first contract, for purposes of being persuaded that the circumstances are such that the consent appears to have been not fully voluntary.
As to the agency issue, it’s very difficult to comment. Of course, in the normal case, an agent is not liable for a contract entered into on behalf of a disclosed principal. The alleged agent’s brief does not go into detail as to why the ordinary principle may not apply, so one cannot really comment thoughtfully on that.
The brief also discusses claims the alleged contract was not sufficiently definite. That is, of course, an important factor. The context does not capture my fancy at the moment, so I’ll pass on addressing that.
This entry was posted in Copyright © 2014 Royce Barondes, Pending, Uncategorized and tagged consideration, pre-existing legal duty, third-party on June 27, 2014 by Royce Barondes.
“Hereunder” is Hereinafter Banned Herein–Naeger v. Farmers Insurance Co.
One of the practice pointers I received while practicing on Wall Street is that one should review with skepticism use in contracts of “herein” and like expressions. Though it’s often clear what’s “here”–sometimes it’s not (whether an entire agreement or a section or something else. So, for the past decade or so, in teaching either Contracts or the law of Corporate Finance (generally involving construction of corporate financing instruments), I’ve shared concern with that phrasing with students.
I’m not always sure they’ve been convinced. Behold–a brief quoting a dictionary to define “hereunder”. Naeger v. Farmers Insurance Co., Inc., 2014 WL 462945 (Mo. Ct. App., W.D.).
We will pay all sums which an insured person is legally entitled to recover as damages from the owner or operator of an UNDERinsured motor vehicle because of bodily injury sustained by an insured person. The bodily injury must be caused by an accident, and arise out of the ownership, maintenance or use of the UNDERinsured motor vehicle.
We will not provide insurance for a vehicle other than your insured car or your insured motorcycle, unless the owner of that vehicle has no other insurance applicable hereunder.
So here we have one of those cryptic usages of “herein”, “hereunder”, etc. Who knows what the sentence means.
3. If the injured person was occupying a vehicle you do not own which is insured for this coverage under another policy.
The victim’s counsel, relying on some out-of-State authority, makes a thoughtful argument–it surely would be an awkward state of affairs if coverage by other insurers aggregating less than the policy limit under the plaintiff’s own underinsured motorist coverage would operate to eliminate coverage under the plaintiff’s own underinsured motorist coverage. Victim’s counsel seems to categorize the victim’s insurer as taking that position. Perhaps the insurer/defendant will clarify–there is a cryptic reference in the brief to the $190,000 having been “settled”, although not in reference to policy limits, unlike the $50,000 from the other driver’s insurer.
This entry was posted in Copyright © 2014 Royce Barondes, Uncategorized and tagged herein, hereunder, insurance, interpretation on February 15, 2014 by Royce Barondes.
15 CSR 60-8.070. One hopes they do.
If one thinks businesses’ performance of consumer contracts is characterized by an overabundance of diligence—and that the law should encourage more inadequate and defective performance—one would seek to construe non-literally the words of this rule. Taking-up the standard is a car repair facility in Jackson v. Hazelrigg Automotive Service, Inc., 2013 WL 3191829 (Mo. Ct. App. S.D.).
This entry was posted in Copyright (c) 2013 Royce Barondes., Pending, Uncategorized and tagged consumer, MMPA, unilateral breach on September 6, 2013 by Royce Barondes.

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