Problem
Consider the following two cases of contract modification: In Recker v. Gustafson (279 N.W.2d 744, 1979), the Reckers agreed to pay the Gustafsons $290,000 for a farm. Prior to closing, however, the Gustafsons demanded an additional $10,000 after informing the Reckers that they were "willing to go to court to get out of the [original] agreement and that litigation was expensive." The Reckers agreed to the price increase but later sued to have it refunded, claiming coercion.
In Blakeslee et al. v. Board of Water Com'rs of City of Hartford (139 A. 106, 1927), the plaintiff sought and obtained a price increase when the cost of building a dam rose unexpectedly due to the diversion of workers and materials at the outbreak of WW I. The city later sued to have the original price reinstated.
(a) Did the promisors offer new consideration in support of the requested price increase in either of these cases?
(b) Does economic theory provide any basis for distinguishing between the two cases? Explain.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.