Asked by Emily Lutsock on May 21, 2024
Verified
Daniel owes Casey a debt,the amount of which is subject to a good faith dispute.The parties agree to settle the debt,with Daniel promising to pay Casey $15,000 and Casey promising to release Daniel on a $25,000 debt.The settlement agreement:
A) is supported by consideration.
B) lacks consideration because Casey is not giving Daniel any legal value.
C) lacks consideration because Daniel is promising to perform a preexisting legal obligation.
D) is binding under UCC section 2-209 even though there is no consideration.
Good Faith Dispute
A disagreement where both parties have legitimate reasons for their position, implying neither is acting deceptively or maliciously.
Settlement Agreement
A legally binding contract between parties to a dispute, where they agree on the terms to resolve their differences without further litigation.
Legal Obligation
A duty enforced by law, requiring an individual or organization to follow or avoid a specific course of action.
- Recognize the impact of consideration in contract modifications and settlements.
Verified Answer
Learning Objectives
- Recognize the impact of consideration in contract modifications and settlements.
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