What must be true for a modification to a contract to be valid under the UCC?

For a modification to a contract to be valid under the Uniform Commercial Code (UCC), it must be made in good faith. This principle recognizes that the parties to a contract may need to adapt their agreement to changing circumstances. The UCC permits modifications without requiring the same level of formalities, such as a written agreement or consideration, as might be necessary under common law.

The emphasis on good faith ensures that any modifications are made honestly and fairly, without exploiting the other party. This approach acknowledges the realities of commercial transactions, where flexibility and cooperation between parties can improve business relationships and outcomes.

While consideration is generally required for contract modifications, the UCC allows modifications in certain circumstances to be enforceable even without additional consideration if made in good faith. This flexibility is essential for the functioning of commercial dealings where the nature of goods and market conditions may necessitate changes in agreements.