Which statement about preexisting obligations is correct?

The statement that preexisting obligations do not constitute valid consideration is accurate in the context of contract law. Consideration is a fundamental component required for a legally enforceable contract, which requires that something of value be exchanged between the parties. A preexisting obligation is an obligation that a party is already bound to fulfill under an existing contract or duty. Since the individual is already legally required to perform this duty, any promise to perform it cannot serve as valid consideration in a new agreement.

In legal terms, for consideration to be valid, it must involve a new benefit or a detriment that goes beyond what is already required. Therefore, a promise to do something that one is already obligated to do does not meet this criterion, and thus would not create a binding new contract based on that obligation alone. This principle is critical in understanding how contracts are structured and the importance of ensuring that each party brings something new to the table in their agreements.