Asked by Mikayla Muller on Jul 29, 2024
Verified
In which of the following circumstances is a debt settlement a binding contract?
A) Where the amount of the debt is uncertain or subject to dispute.
B) Where the amount of the debt is certain and undisputed.
C) Where the only consideration the creditor gives the debtor is his promise not to sue the debtor on the original debt.
D) Where the settlement is part of a composition agreement.
Debt Settlement
A negotiation process where a debtor and creditor agree on a reduced balance that will be considered as payment in full.
Uncertain Debt
A debt whose existence or amount is not clear or determined.
Composition Agreement
An arrangement where creditors agree to accept a partial payment from a debtor in full satisfaction of their claims.
- Distinguish between liquidated and unliquidated debts and their implications for consideration.
Verified Answer
ZK
Zybrea KnightAug 05, 2024
Final Answer :
B
Explanation :
A liquidated debt is a debt that is both due and certain;that is,the parties have no good faith dispute about either the existence or the amount of the original debt.
Learning Objectives
- Distinguish between liquidated and unliquidated debts and their implications for consideration.
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