Ann owes a liquidated debt of $3000 to Platinum Body Shop for the work done on her car.She sends Platinum a check for $1000 on which she has marked,"Payment in Full." If Platinum cashes the check,they will not be able to successfully sue Ann for the remainder of the debt.

Question

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The act of marking "Payment in Full" on a partial payment check is known as an accord and satisfaction. It is a form of contract that is binding on both parties when the debtor offers payment with the intent of satisfying the debt and the creditor accepts the payment. However, for an accord and satisfaction to be valid, the amount owed must be disputed or unliquidated. Since Ann owes a liquidated debt of $3000, marking "Payment in Full" on the $1000 check will not prevent Platinum from successfully suing her for the remainder of the debt.

Ann Owes a Liquidated Debt of $3000 to Platinum Body