Qiana writes a check to Payday Loans,Inc.,in an amount that represents half of her debt to the lender.On the back of the check,Qiana includes the words "payment in full." Payday agrees to accept the lesser sum and cashes the check.This discharges the entire debt

Question

Quizplus · Accepted Answer

If the debt is unliquidated, then the acceptance of a smaller sum with the words "payment in full" on the back of the check constitutes a compromise settlement, which discharges the entire debt. However, if the debt is liquidated or past due, the acceptance of a lesser amount with a "payment in full" notation does not necessarily discharge the entire debt unless the creditor agrees to it.

Qiana Writes a Check to Payday Loans,Inc