Levine v. Blumenthal

• Mr. Levine = the lessor in New Jersey = the propriator
• Ms. Blumenthal = the lessee = renter
• The 2 parties entered into a 2-year commercial lease contract.
  • 1st year: $100/month
  • 2nd year: $200/month
• Because of the Great Depression, Levine agreed to allow them to pay $175/month during the 2nd year.
• Levine accepted $175/month for 11 months of the 2nd year.
• Blumenthal informed Levine that they wouldn't renew the lease for the 3rd year because of the continuing bad economic situation.
• Blumenthal vacated the commercial premises before the last month of the 2nd year.

Levine sued Blumenthal for $200 for the final month + $275 [11*(200-175)].

The trial court ruled that the $25/month rent reductions were un-enforceable because of lack of consideration.

Levine won.

Does a change in economic conditions resulting in a party's in-ability to pay the original contract price constitute sufficient consideration to support a subsequent agreement made by parties to reduce the contract price?

No; a change in economic conditions doesn't constitute sufficient consideration.

Even though Levine agreed to & accepted the reduced lease payments of $175, the contract alteration was not enforceable. Blumenthal need to pay the $25/month deficits in the 2nd year.

Affirmed

Justice Heher: Alterations of the terms & conditions of a contract must have new & independent consideration per Pinnel's case, 5 Coke 117a (1602 British case)

Bear in mind that several courts in other states + Restatement (Second) of Contracts have issued opinions contradicting this ruling.