Can a contract modification be legally enforceable if it was made under duress, specifically when employees threaten to stop work unless given higher wages mid-season?

In 1900, employees contracted with Alaska Packers' Association to work as sailors and fishermen at Pyramid Harbor, Alaska for the fishing season. The original agreements specified wages of $50-$60 plus two cents per salmon caught. Upon arrival in Alaska, the employees demanded $100 wages, threatening to cease work and return to San Francisco if their demands were not met. Due to the remote location and short season, the superintendent was unable to find replacement workers. Consequently, a new contract was drafted with the $100 wage, which the employees signed.

Upon return to San Francisco, the company refused to honor the higher wage, asserting the new contract was invalid. Some employees sought legal counsel and subsequently accepted payment under the original contract terms, signing releases. The dispute over the validity of the revised contract and the company's refusal to pay the higher wage led to legal action.

The libelants initiated a maritime lawsuit against Alaska Packers' Association, seeking $100 in wages based on a contract dated May 22, 1900. Alaska Packers denied the existence of this contract, argued it lacked consideration, and claimed the libelants had been fully compensated under the original contracts with signed releases. The lower court ruled in favor of the libelants. Alaska Packers subsequently appealed the decision to the Circuit Court of Appeals.

(Ross, J.)

No. A contract modification made under duress, specifically when employees threaten to stop work unless given higher wages mid-season, is not legally enforceable. The modification lacks sufficient consideration to be binding. Consideration is a fundamental requirement for a valid contract or contract modification. When employees agree to perform work they are already legally obligated to do under an existing contract, they provide no new consideration to support the employer's promise of increased wages. This principle is firmly established in contract law across multiple jurisdictions. Allowing such modifications would incentivize bad faith and encourage contract violations, undermining the stability and reliability of contractual agreements. The threat to stop work mid-season constitutes economic duress, further invalidating the modification. Courts have consistently held that promises of additional pay for services already contracted for are without consideration and unenforceable. This rule protects employers from being coerced into unfair modifications and maintains the integrity of original contractual obligations. While some jurisdictions have adopted contrary positions, these are viewed as unsound in principle and against the weight of legal authority. The law recognizes the importance of upholding freely negotiated contracts and discourages attempts to extract additional benefits through threats or coercion. Enforcing such modifications would set a dangerous precedent, potentially destabilizing commercial relationships and encouraging opportunistic behavior in contractual dealings.