Daniel owes Casey a debt,the amount of which is subject to a good faith dispute.The parties agree to settle the debt,with Daniel promising to pay Casey $15,000 and Casey promising to release Daniel on a $25,000 debt.The settlement agreement:
A)is supported by consideration.
B)lacks consideration because Casey is not giving Daniel any legal value.
C)lacks consideration because Daniel is promising to perform a preexisting legal obligation.
D)is binding under UCC section 2-209 even though there is no consideration.

Question

Quizplus · Accepted Answer

A good-faith dispute about either the existence or the amount of a debt makes the debt an unliquidated debt.The settlement of an unliquidated debt is called an accord and satisfaction and satisfies the consideration requirement.When an accord and satisfaction has occurred,the creditor cannot maintain an action to recover the remainder of the debt that he alleges is due.

Daniel Owes Casey a Debt,the Amount of Which Is Subject