Alaska Packers’ Association v. Domenico
Citation: United States Court of Appeals, Ninth Circuit, 117 F. 99 (1902)
Facts
A group of sailors entered contracts in San Francisco to work on an Alaska fishing voyage for specified wages. After arriving in Alaska — far from any available replacement workers — the sailors refused to work unless the company agreed to pay them higher wages. The company’s superintendent, having no practical alternative, signed a new agreement promising the higher pay. Upon returning to San Francisco, the company refused to pay the higher wages, and the sailors sued.
Issue
Whether a promise to pay additional compensation for work a party is already contractually obligated to perform is enforceable, and whether economic pressure to modify a contract in a remote location constitutes actionable duress.
Holding
The Ninth Circuit held that the modification was unenforceable. The sailors gave no new consideration for the promise of higher wages — they were already bound to do the same work — and the company’s promise was therefore without consideration. The court also noted the coercive circumstances undermined the voluntariness of the agreement.
Rule
A promise to pay additional compensation for performance of a preexisting contractual duty is unenforceable for lack of consideration (the preexisting duty rule). A party cannot demand and enforce a modification to a contract by threatening non-performance of an existing obligation, particularly where the other party has no practical alternative.
Significance
The leading preexisting duty rule case, used to teach both the traditional consideration doctrine and economic duress. Contrasted with UCC § 2-209, which allows good-faith modifications without consideration, and with Restatement (Second) § 89, which permits modifications induced by unanticipated circumstances. Sets up debates about when contract modifications should be enforceable.