Ethan is indebted to Finance Credit Corporation for $100,000. Ethan agrees to pay, and Finance Credit agrees to accept, a lesser amount than the creditor originally claimed was owed. This agreement is
A) an accord.
B) a release.
C) a satisfaction.
D) an illusory promise.

Question

Quizplus · Accepted Answer

An accord is an agreement between parties to settle a debt for a lesser amount than originally claimed. It is usually followed by a satisfaction, where the lesser amount is paid and the debt is considered fully settled. A release is a relinquishment of a claim or right, and a satisfaction is the full settlement of a debt. An illusory promise is a statement that appears to be a promise but is not binding because it lacks consideration or definiteness.

Ethan Is Indebted to Finance Credit Corporation for $100,000