Is a contract enforceable when one party agrees not to sue another for breach of existing contracts?

Question

Is a contract enforceable (i.e. is there consideration) when one party (in good faith or in bad faith) agrees not to initiate litigation (or not to sue) against the other party for an alleged breach of an existing contract between the parties.

If anyone can point to a site that specifically mentions this or a case where this was resolved, it would be much appreciated.

Answer 1

As noted in other answers, a contract depends on mutually valid consideration.

Typically, the remedy for a breach is in dispute (as is the fact of a breach itself). If as part of forming a new contract, there is some modification of conditions and both sides agree to waive claims under the old contract, the new contract is enforceable.

If, on the other hand, the party that breached the contract has leverage (e.g. sole supplier of a necessary part for the other parties product) and uses that leverage to coerce a waiver of any liability for past breaches and additional compensation for resuming its responsibilities under the old contract, a court might seriously question whether or not there was true consideration in the new contract.

Answer 2

Yes -- a promise not to sue is generally considered valid consideration for that party so agreeing -- of course, the other party also needs to provide consideration.

As for the case citation -- that would obviously depend on your country and state/province.

Answer 3

If the contract-breaker gives something of value in exchange for the promise not to sue, then it is enforceable.

Answer 4

yeah i think this is for blaw hw. does anyone have any case to cite for it though, or a link to a website that can be cited that confirms what people above are saying?

Answer 5

sounds like my homework assignment...nyu? 11am b-law, tues & thurs? this is santi, btw