Asked by MaryJean Throm on Jul 23, 2024
Verified
Cyril owed Robert $12,000 but since he had lost his job, he could only pay $7,000. Reluctantly, Robert agreed, since they were old friends, to accept the lesser amount as full payment of the debt, and Cyril gave him the money. Now Robert has heard that Cyril has just won a huge amount in a lottery, but Cyril will not pay him the rest of the debt. "A deal's a deal," he says.
A) Since Cyril gave no consideration for Robert's promise to forgive the rest of the debt, Robert can successfully sue him for the balance.
B) While Robert would have been able to sue Cyril under Common Law, statute law says that, having accepted part of the debt as payment for the full amount, Robert cannot now demand the balance.
C) Whether or not Robert could successfully sue for the balance of the debt, the courts would not allow a debtor to be unjustly enriched in this way and would order Cyril to pay Robert the balance of the debt.
D) All of the responses are correct.
E) None of the responses are correct.
Consideration
The benefit or value that must be exchanged between parties to form a valid contract.
Common Law
A legal system based on precedent and court decisions rather than written laws or statutes.
Statute Law
Law enacted by a legislative body, such as a parliament or congress, officially documented and codified.
- Understand the legal implications of accepting partial debt payments and the principle of accord and satisfaction.
Verified Answer
DC
Daniel CantuJul 26, 2024
Final Answer :
B
Explanation :
Under many legal systems, once a creditor accepts a lesser amount as full and final settlement of a debt, they cannot later demand the remaining balance, especially if there was an agreement to that effect. This principle is often codified in statute law, overriding common law principles that might otherwise allow for the recovery of the full debt.
Learning Objectives
- Understand the legal implications of accepting partial debt payments and the principle of accord and satisfaction.