Last year, Michelle ran into serious financial difficulties and was unable to pay Duncan $30,000 owed by Michelle to Duncan for goods which had been supplied by Duncan to Michelle . In order to avoid adverse criticism of her friend Michelle, Kim decided to pay the $30,000 to Duncan although she had no legal obligation to do so . Accordingly, Kim wrote to Duncan that "in order to maintain Michelle's reputation and to encourage you to do business with Michelle in the future" she will pay the $30,000 . Duncan hurriedly accepted. Kim now refuses to pay.

Last January also, Shane entered into a contract with Kyle under which Kyle was to supply Shane with 500,000 concrete blocks per month at a price of $200,000 for a period of two years . The contract further provided that, if Kyle failed to supply the concrete blocks in any month, Shane would be at liberty to treat the contract as terminated. In November last year, however, Kyle was unable to supply the concrete blocks because of an astronomical rise in the price of cement . In these circumstances, Shane offered to pay Kyle a lump sum of $20,000 "to offset the cost of producing the concrete blocks in any month that Kyle met the monthly target of 500,000 ." Kyle accepted this offer. Shane also promised Kyle that he would not enforce his right under the contract to terminate it. Kyle was able to meet the target in December and January but failed in February. Shane is now refusing to pay the lump sums for the months in which Kyle met the target and is claiming to terminate the contract immediately. Advise Duncan and Kyle.