## Facts

- An excavation contractor agreed in a written contract to excavate a cellar and remove all material from the site for a stated price calculated from a unit excavation rate, with no express allowance for unexpected subsurface conditions.
- Soon after work began, the contractor encountered solid ledge rock and notified the property owner.
- The parties met and orally agreed the contractor would remove rock at a stipulated unit price about nine times the original unit price used to compute the written contract price.
- The rock comprised roughly two-thirds of the excavation, and the contractor performed most of the work under the higher oral rate.
- After completion, the owner refused to pay the higher rate, asserting the contractor had a pre-existing duty under the written contract to remove all material, including rock, for the original price.
- The contractor sued in assumpsit for work performed; a referee found the oral agreement superseded the written contract, and the trial court entered judgment for the contractor.

## Issues

1. Whether the parties’ oral agreement to pay substantially more for rock removal was enforceable, or void for lack of consideration under the pre-existing duty rule.
2. Whether the presence of unexpected rock constituted a mutual mistake permitting avoidance of the original written contract.

## Decision

- The Supreme Court of New Hampshire overruled the owner’s exceptions and affirmed judgment for the contractor.
- The court held the referee could find the oral agreement superseded the written contract, operating as a rescission of the prior agreement and a substitution of a new contract.
- The court rejected mutual mistake as a basis to avoid the written contract because the written terms were unqualified and covered excavation of the space regardless of the soil’s character.
- Treating the transaction as rescission and substitution, the court concluded the owner’s promise to pay more was enforceable and not defeated by the pre-existing duty argument.

## Legal Principles

- A subsequent agreement may be enforced where the parties mutually rescind an existing contract and substitute a new contract, even if the new agreement closely resembles the prior one except for price.
- The pre-existing duty rule does not bar enforcement when the earlier contract has been rescinded; performance is then rendered under the substituted agreement rather than under a continuing prior duty.
- Unexpected subsurface conditions do not constitute mutual mistake where the contract allocates the risk by requiring excavation and removal of all material without qualification.
- A party’s voluntary surrender of a contractual right (such as insisting on the original price) can support enforcement of a substituted agreement reached by mutual assent.

## Conclusion

The court enforced the higher rock-removal price because the factfinder could treat the parties’ oral agreement as a voluntary rescission of the written excavation contract and a substituted contract, defeating the owner’s lack-of-consideration defense and rejecting mutual mistake where the original contract allocated the risk of subsurface conditions.


Watkins & Son, Inc. v. Carrig, 91 N.H. 459, 21 A.2d 591 (N.H. 1941)