Modification, Rescission, and Waiver

1. Law
2. Georgia Code
3. Commercial Code
4. Sales
5. Form, Formation, and Readjustment of Contract
6. Modification, Rescission, and Waiver

1. An agreement modifying a contract within this article needs no consideration to be binding.
2. A signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded, but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party.
3. The requirements of the statute of frauds section of this article (Code Section 11-2-201) must be satisfied if the contract as modified is within its provisions.
4. Although an attempt at modification or rescission does not satisfy the requirements of subsection (2) or (3) of this Code section it can operate as a waiver.
5. A party who has made a waiver affecting an executory portion of the contract may retract the waiver by reasonable notification received by the other party that strict performance will be required of any term waived, unless the retraction would be unjust in view of a material change of position in reliance on the waiver.

(Code 1933, § 109A-2 - 209, enacted by Ga. L. 1962, p. 156, § 1.)

Cross references.

- Effect of mutual departure from contract terms, § 13-4-4.

Law reviews.

- For article discussing exclusion or modification of warranties under the U.C.C., see 1 Ga. St. B.J. 191 (1964). For article, "Impracticability As Risk Allocation: The Effect of Changed Circumstances upon Contract Obligations for the Sale of Goods," see 22 Ga. L. Rev. 503 (1988). For note, "The Scope and Meaning of Waiver in Section 2-209 of the Uniform Commercial Code," see 5 Ga. L. Rev. 783 (1971).

JUDICIAL DECISIONS

Test of good faith for modifications.

- Effective use of bad faith to escape performance on original contract terms is barred, and extortion of "modification" without legitimate commercial reason is ineffective as a violation of duty of good faith. Fratelli Gardino v. Caribbean Lumber Co., 587 F.2d 204 (5th Cir. 1979).

Waiver of breach.

- One having accepted benefits arising under contract after being notified of anticipated breach, and not having given notice of intention to rely on its exact terms, but having continued to accept benefits thereunder, may not recover for such alleged breach or failure to perform fully order the complete terms of the original agreement. Acceptance of such benefits after notice of an alleged breach will constitute waiver of breach. B-Lee's Sales Co. v. Shelton, 141 Ga. App. 870, 234 S.E.2d 702 (1977).

Cited in Lunsford v. Wilson, 113 Ga. App. 602, 149 S.E.2d 515 (1966); Ryder Truck Lines v. Scott, 129 Ga. App. 871, 201 S.E.2d 672 (1973); Pirrone v. Monarch Wine Co., 497 F.2d 25 (5th Cir. 1974); Cook-Davis Furn. Co. v. Duskin, 134 Ga. App. 264, 214 S.E.2d 565 (1975); Trust Co. v. Montgomery, 136 Ga. App. 742, 222 S.E.2d 196 (1975); Fratelli Gardino v. Caribbean Lumber Co., 447 F. Supp. 1337 (S.D. Ga. 1978); Dan Gurney Indus., Inc. v. Southeastern Wheels, Inc., 168 Ga. App. 504, 308 S.E.2d 637 (1983); Integrated Micro Sys. v. NEC Home Elec. (USA), Inc., 174 Ga. App. 197, 329 S.E.2d 554 (1985).

RESEARCH REFERENCES

Am. Jur. 2d.

- 15A Am. Jur. 2d, Commercial Code, § 4. 67 Am. Jur. 2d, Sales, §§ 348-374.

6 Am. Jur. Pleading and Practice Forms, Commercial Code, § 2:60. 9A Am. Jur. Pleading and Practice Forms, Estoppel and Waiver, § 39.

C.J.S.

- 37 C.J.S., Frauds, Statute of, § 232. 77A C.J.S., Sales, § 109 et seq. 78 C.J.S., Sales, § 565.

U.L.A.

- Uniform Commercial Code (U.L.A.) § 2-209.

ALR.

- Promise of additional compensation for completing building or construction contract, 25 A.L.R. 1450; 55 A.L.R. 1333; 138 A.L.R. 136.

Necessity of independent consideration to support a modification of the price in a contract of sale, 34 A.L.R. 511.

Consideration for modification of terms of existing tenancy, 43 A.L.R. 1451; 93 A.L.R. 1404.

Duty to minimize damages by accepting offer modified by party who has breached contract of sale, 46 A.L.R. 1192.

Action involving rescission or right to rescind contract and to recover amount paid thereunder as one at law or in equity, 95 A.L.R. 1000.

Action based on rescission of contract as one arising on contract, express or implied, within the meaning of attachment statute, 95 A.L.R. 1028.

Pecuniary damage as essential to rescission of contract for purchase of real or personal property, 106 A.L.R. 125.

Repossession of chattels by seller upon their return or abandonment by buyer as effecting a mutual rescission or as evidence thereof, 106 A.L.R. 703.

Requirement of written contract as condition of mechanic's lien as affected by an oral modification, or a modification partly oral and partly written, of a written contract, or a subsequent modification in writing not registered or filed as required by statute, 108 A.L.R. 434.

Timeliness of tender or offer of return of consideration for release or compromise, required as a condition of setting it aside, 53 A.L.R.2d 757.

Validity and effect of provision in contract against mechanic's lien, 76 A.L.R.2d 1087; 75 A.L.R.3d 505.

Enforceability of voluntary promise of additional compensation because of unforeseen difficulties in performance of existing contract, 85 A.L.R.3d 259.

Affirmations or representations made after the sale is closed as basis of warranty under UCC § 2-313(1)(a), 47 A.L.R.4th 189.

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