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

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In general, a promise to discharge a debt is not binding without consideration. Since the debt was undisputed and past-due, C's promise to forgive the remaining $100 lacks consideration and is not legally binding.

D Owes C a Past-Due Undisputed Debt of $500