Question

Nancy Fur Supply has been selling fur coats to Patricia's Fur Shop pursuant to an existing contract. The price of fur pelts goes up sharply and Nancy concludes that she can no longer continue to supply the coats to Patricia's at the agreed price. Nancy asks Patricia to agree to a 10 percent increase in the price of the coats and Patricia agrees but then later changes her mind and refuses to pay the additional 10%. In that case, Patricia:

Answer 1

Answer:

In that case, Patricia:

is still liable to pay the additional 10%.

Explanation:

The 10% price increase was preceded by an agreement between the two parties.  Patricia is bound to honor her agreements with her business partner to sustain the business relationship.  Refusing to pay a debt just by a change of mind does not repudiate the contract.  Nancy can enforce the agreement in the court for specific performance of the contract because this additional agreement simply modifies the earlier contract and remains enforceable.