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19-9. Contract Modication. Ritz-Craft Corp. contracted with the Stanford Management Group (SMG) to manufacture and install prefabricated multifamily housing units for EMS. RitzCraft was also
19-9. Contract Modication. Ritz-Craft Corp. contracted with the Stanford Management Group (SMG) to \"manufacture and install prefabricated multifamily housing units" for EMS. RitzCraft was also to set the units on the foundations constructed by SMG, as well as provide some connective work for electricity, plumbing, and so on. The original contract price for forty-nine units was $1,613,500, but a subsequent modication to the contract due to unforeseen circumstances raised the price by $45,000. SMG refused to pay the additional $45,000, arguing that the modication was not enforceable because it had not been accompanied by consideration. Ritz-Craft sued for breach of contract. If no consideration was given, is the agreement to modify the original contract binding? Does the manufacture and installation of modular homes involve goods or services? Discuss fully how the court should rule on each of these issues. [Ritz-Craft Corp. v. Stanford Management Group, 800 F.Supp. 1312 (D.Md. 1992)]
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