Author Question: XYZ Company, a distributor of auto parts, is in debt to the bank for $35 000 due on February 25. The ... (Read 155 times)

oliviahorn72 · **on:** Aug 7, 2021

XYZ Company, a distributor of auto parts, is in debt to the bank for $35 000 due on February 25. The company is having difficult times and wants to negotiate with the bank to pay only $33 000 as payment in full. With these facts in mind, which of the following statements of the law is true?
◦ If the company obtained from the bank the bank's promise to forgive the $2000 under seal, the bank could later sue for the remainder.
◦ If the bank agrees to accept the $33 000 as payment in full if paid early, by February 15, and the company does as requested, the bank could later sue for the remainder because the company gave good consideration for the bank's forgiveness of the debt.
◦ At common law, if the bank accepted the $33 000 as payment in full, even absent additional consideration, it could not later sue for the remainder because such promises are always binding.
◦ Even if the bank takes the $33 000, the bank can still sue for the entire amount plus punitive damages.
◦ A statutory provision provides that the creditor who accepts less than full payment as payment in full cannot later sue for the remainder.

bpool94 · **Reply #1 on:** Aug 7, 2021

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