Opinion ID: 1138261
Heading Depth: 3
Heading Rank: 2

Heading: failure to tender consideration

Text: It is well recognized in Mississippi contract law that past consideration cannot form the basis of a valid contract, except in certain situations. See Jim Murphy & Assoc., Inc. v. LeBleu, 511 So.2d 886, 891 (Miss. 1987). In this case, Nancy Beard paid Iuka Guaranty Bank all of the money which Iuka Guaranty considered necessary to release Lot 7 from the deed of trust. However, because the Beards had additional debts with Iuka Guaranty which were not paid, Iuka Guaranty did not release Lot 44, secured by a dragnet clause with a separate deed of trust on each Lot, 7 and 44, for the same business debts. For, Note 8128, which was in existence on August 23, 1985, was later combined with two other notes into Note 6881 on October 19, 1985. It was never paid, but was always secured by real estate, according to bank records). Nancy Beard alleges that Iuka Guaranty promised to release both lots from the deeds of trust in exchange for her payment of Note 40, which totaled approximately $38,000. However, Nancy Beard asked about the release of the deed of trust by from Iuka Guaranty only after she had paid the loan to Iuka Guaranty. Nancy Beard stated that the issue of Lot 44 (the vacant lot) only came up as an afterthought after the payments. Since this alleged agreement to amend only occurred after her tender of alleged consideration, her payoff of the $38,000 would only be past consideration, which is insufficient to form a new contract required to negate a dragnet clause. Singing River Mall v. Mark Fields, Inc., 599 So.2d 938, 947 (Miss. 1992) (holding that contract modifications must meet the requirements for a valid contract, presumably including new consideration). Therefore, this issue alone would cause reversal of this case, since the dragnet clause was not superseded by a new contract, and was legally still binding against P.O. and Nancy Beard.