Opinion ID: 2320577
Heading Depth: 2
Heading Rank: 2

Heading: Interest on Transportation Costs

Text: Appellants next contend the trial judge erred in imposing the 1.5% delinquent account interest rate for the unpaid delivery fees. [11] They rely on the fact that the September delivery contract, separate and distinct from the August contract, included no interest rate provision for late accounts. Knight counters that the judge properly found as a matter of fact that the September contract constituted a modification, and thus no error occurred in charging delinquency interest under the whole contract. The trial judge did not err in applying the 1.5% interest rate to the unpaid delivery fees. Generally, whether the contracting parties have executed a new agreement or instead modified their original agreement is a question of fact. See Hershon v. Hellman Co., 565 A.2d 282, 283-84 (D.C.1989); Gagnon v. Wright, 200 A.2d 196, 198 (D.C.1964). See also 2A RONALD A. ANDERSON, ANDERSON ON THE UNIFORM COMMERCIAL CODE § 2-209:12 (3d ed. 1997) (Because the question[] of modification. . . [is] dependent upon the intent of the parties or of one of the parties, it necessarily follows that ordinarily the questions involved are questions of fact.). Modification of a contract normally occurs when the parties agree to alter a contractual provision or to include additional obligations, while leaving intact the overall nature and obligations of the original agreement. See, e.g., Enserch Corp. v. Rebich, 925 S.W.2d 75, 83 (Tex.App.1996) (Modification of a contract is some change in an original agreement which introduces a new or different element into the details of the contract but leaves its general purpose and effect undisturbed.), cited in ANDERSON, supra, § 2-209:12 (West Supp. 2001) (A modification of a contract is some change in the original agreement [that] leaves the general purpose and effect of the contract unchanged.); see also Horbach v. Kaczmarek, 934 F.Supp. 981 (N.D.Ill.1996) (storage agreement was a modification of original purchase order, instead of a new contract, when the agreement merely supplemented the original purchase order). Contracting parties may modify a written agreement by subsequent oral communications, Gagnon, 200 A.2d at 198, unless a clause bars such modification. See Marlowe v. Argentine Naval Comm'n, 257 U.S.App. D.C. 225, 228, 808 F.2d 120, 123 (1986); D.C.Code § 28:2-209(2) (A signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded.. . .). [12] The trial judge determined that the September 1997 communications amounted only to a modification of the earlier contract. Despite some ambiguity in his discussion of the issue, his oral findings of fact demonstrate that he viewed both agreements as a single contract. Thus, he stated that there was indeed a contract . . . for the supplying of planks and the delivery of the planks (emphasis added), and later referred to the agreements as one overall contract. At no point did he appear to treat the September exchanges as the formation of a new agreement. And, in his written decision, he applied the contractual interest rate to the outstanding balance on the unpaid delivery expenses, as required by § 15-108. [13] Sufficient evidence supports the finding of modification. Knight presented testimony that, despite use of the shipping term F.O.B. Plant, Mr. Hildreth had asked him to deliver the planks and agreed to pay for the additional costs. Knight submitted documents memorializing Mr. Hildreth's oral request and the charge for the delivery, and specifically testified that he thought the shipping was considered a change of the original contract. Nothing in the August contract prohibited subsequent modification. And the agreement for Knight to deliver the planks at HCE's expense cannot be said to have changed the general purpose and effect of the contract, see Enserch Corp., supra ; indeed, it did not change even the delivery terms significantly, because HCE was to bear the costs of delivery regardless of who transported the goods. In sum, we find no error in the determination that the parties had modified their contract. Pursuant to § 15-108, the judge thus properly applied the agreement's 1.5% monthly interest rate to the unpaid delivery costs. [14] Affirmed.