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84-2-209. 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A signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded, but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party.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 (section 84-2-201) 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) 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.

History: L. 1965, ch. 564, § 33; January 1, 1966.

KANSAS COMMENT, 1996

1. Subsection (1) of this section abolishes the common law pre-existing duty rule, under which a contract modification is unenforceable without some new consideration. Instead, the subsection leaves the policing of modifications to the duty of good faith and fair dealing generally applicable under the Code. See 84-1-203. As Official Comment 2 explains, "the extortion of a 'modification' without legitimate commercial reason is ineffective as a violation of the duty of good faith."

2. Subsection (2) permits the parties to write their own statute of frauds into an agreement. It makes effective a "no oral modification" clause in a signed agreement. See Wayman v. Amoco Oil Co., 923 F. Supp. 1322 (D. Kan. 1996). If a merchant supplies a form containing a no oral modification clause to be signed by a non-merchant, the non-merchant must separately sign at the location of the clause.

3. The proper interpretation of subsection (3) is uncertain. The subsection provides that the requirements of the statute of frauds (84-2-201) "must be satisfied if the contract as modified is within its provisions." A modification that increases the contract price from below $500 to over $500 would certainly trigger the writing requirement. In addition, a modification that changes the quantity term of a contract otherwise subject to the statute of frauds would need to be evidenced by a writing, since 84-2-201(1) limits enforcement of a contract subject to the statute to the quantity stated in writing. See DP-Tek, Inc. v. AT&T Global Info. Solutions Co., 891 F. Supp. 1510 (D. Kan. 1995) (citing Kansas Comment 1983 with approval). In addition, some authority would require a writing when the price itself is modified by more than $500. See Kansas Comment 1983 to this section. But see William H. Henning & George I. Wallach, The Law of Sales Under the Uniform Commercial Code § 2.04[1], at 2-9 (rev. ed. 1992). Oral modifications of any other term should be permitted. In addition, the exceptions to the statute of frauds found in 84-2-201 should apply as well to a modification that falls within subsection (3). See Starry Constr. Co. v. Murphy Oil USA, Inc., 785 F. Supp. 1356 (D. Minn. 1992), aff'd, 986 F.2d 503 (8th Cir. 1993).

4. Under subsection (4), an attempted oral modification that fails to satisfy subsections (2) or (3) may still be effective as a waiver, either of the term itself or of the writing requirement. Some courts require that the party asserting the waiver have reasonably relied on the oral modification. Wisconsin Knife Works v. National Metal Crafters, 781 F.2d 1280 (7th Cir. 1986). A party that waives an executory portion of a contract may, under subsection (5), retract the waiver by giving reasonable notice until the other party has relied on the waiver.

Law Review and Bar Journal References:

"Beefing Up Product Warranties: A New Dimension In Consumer Protection," Barkley Clark, Michael J. Davis, 23 K.L.R. 567, 572 (1975).

"History of Warranties of Quality in Sale of Goods," Paul B. Rasor, 21 W.L.J. 175, 188 (1982).

"Deregulation and Natural Gas Purchase Contracts: Examination Through Neoclassical and Relational Contract Theories," Danton B. Rice, Michael A. Schlueter, 25 W.L.J. 43, 59 (1985).

"Electronic Commerce in Kansas: Contract Formation and Formalities Under Article 2," Christopher R. Drahozal, 68 J.K.B.A. No. 5, 22 (1999).

CASE ANNOTATIONS

1. Failure of company to provide either quantity or quality of goods called for entitled buyer to suspend performance. LNS Inv. Co., Inc. v. Phillips 66 Co., 731 F. Supp. 1484 (1990).

2. Alleged oral argument between customer and vendor was not valid modification of original agreements. DP-Tek, Inc. v. AT&T Global Information Co., 891 F. Supp. 1510, 1518 (1995).

3. Evidence of alleged unwritten agreement between dealer and franchisee inadmissible without written evidence. Wayman v. Amoco Oil Co., 923 F. Supp. 1322, 1343 (1996).

4. Summary judgment granted on claim reconditioner of surgical tools was guilty of helping hospitals violate patent. U.S. Surgical Corp v. Orris, Inc., 5 F. Supp. 2d 1201, 1205 (1998).

5. Held that contract was formed before software shipped and enclosed licensing agreement must be treated as a proposal to modify terms of the contract. Wachter Management Co. v. Dexter & Chaney, Inc., 282 Kan. 365, 378, 144 P.3d 747 (2006).

6. Signed agreement which excludes modification or recision except by signed agreement cannot be otherwise modified or rescinded. Law Co. v. Mohawk Const. & Supply Co., 523 F. Supp. 2d 1276, 1284, 1285 (2007).


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