A software company enters into an agreement with a freelance developer. Under the agreement, the developer promises to create a custom application for the company, and in exchange, the company promises to pay the developer $50,000. Before any work begins, the company unilaterally decides that it will pay the developer $45,000 instead. The developer verbally agrees to the lower payment. Later, the company refuses to pay even $45,000, arguing that the agreement is unenforceable. Is the agreement to reduce the original $50,000 payment enforceable?
The developer's agreement to a lower payment indicates acceptance of the modified terms.
The enforceability of oral modifications is restricted by the statute of frauds.
The reduction in payment prior to work commencing creates ambiguities regarding the original agreement's enforceability.
The lack of new consideration in the payment reduction undermines the validity of the modification.
The agreement to reduce the payment to $45,000 is not enforceable because it lacks new consideration. Modifications to contracts require an exchange of additional benefit or detriment, which is absent here. While the developer verbally agreed to the reduction, this did not provide any new legal detriment or benefit to the company or developer, making the modification unenforceable. The incorrect options either misunderstand the role of new consideration in modifications or overstate the applicability of the statute of frauds, which is not the key issue when an original agreement is already valid and enforceable.
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