Delany owes Carl a past-due undisputed debt of $500.Delany sees Carl in a bar and pays him $400.Carl then says to Delany,"Forget about the other $100 you owe me.I'm glad to get the $400." Carl's promise to discharge the remainder of the debt is binding.

Question

Quizplus · Accepted Answer

Carl's promise to discharge the remainder of the debt is not binding because there is no consideration for Carl's promise to forgive the $100. In contract law, for a modification or a promise to be binding, there must be new consideration; since the debt was undisputed and past due, paying a portion of it does not constitute new consideration.

Delany Owes Carl a Past-Due Undisputed Debt of $500