## Facts

- A landlord leased a retail store to tenants for a two-year term beginning May 1, 1931, for women’s apparel sales.
- The written lease set rent at $2,100 for year one ($175/month) and $2,400 for year two ($200/month), payable monthly in advance.
- Before year two began, tenants asserted business decline made the $200/month rent “absolutely impossible” and indicated they would leave or fail if the increase were required.
- The parties orally discussed continuing at $175/month; the tenants claimed the landlord agreed to that rate “until business improved,” while the landlord claimed he agreed only to accept $175 “on account.”
- For eleven months of the second year, tenants paid and the landlord accepted $175/month rather than $200/month.
- Tenants did not exercise a renewal option and surrendered the premises at the end of the two-year term, paying nothing for the final month.
- The landlord sued for (1) the $25/month difference for eleven months and (2) the unpaid final month’s $200 rent.
- The trial court found an oral rent-change agreement was made but held it unenforceable for lack of consideration and entered judgment for the landlord under the written lease.

## Issues

1. Whether a subsequent oral agreement reducing rent under a written lease is enforceable without new and independent consideration.
2. Whether the landlord’s acceptance of reduced rent payments for most of the second year barred recovery of the contract rent balance under accord-and-satisfaction or substitute-performance principles.

## Decision

- The Supreme Court of New Jersey affirmed the judgment for the landlord.
- The court held that a contract modification must be supported by new and independent consideration; tenants’ payment of less than the fixed rent owed was not consideration.
- The landlord’s acceptance of $175/month did not constitute an enforceable accord and satisfaction because the rent was a fixed, undisputed obligation.
- The tenants remained liable for the $25/month shortfall for eleven months plus the unpaid final month’s $200 rent.

## Legal Principles

- A post-formation agreement altering a prior contract is enforceable only if supported by new and independent consideration.
- Performance (or promised performance) of an existing legal duty cannot serve as consideration for a new promise.
- Part payment of a liquidated, undisputed debt or fixed rent is not consideration for a creditor’s promise to accept less in full satisfaction.
- Economic distress and a creditor’s concern about a debtor’s potential insolvency do not, by themselves, supply consideration for a creditor’s concession.

## Conclusion

The court enforced the written lease’s rent terms because the alleged oral rent reduction lacked new consideration and did not qualify as an accord and satisfaction of a fixed, undisputed obligation, allowing the landlord to recover the rent shortfall and the unpaid final month.


Levine v. Blumenthal, 117 N.J.L. 23, 186 A. 457 (N.J. 1936)