Sam owed Joe $6,000 due January 12, 2012. On January 1st, Joe said he'd take $5,000 in full satisfaction of the debt if Sam paid him $5,000 on January 5th instead. Sam paid on January 5th. A week later, Joe wants to sue Sam for the $1,000 he (Joe) was legally owed. Which of the following is true?
A) Joe would win because they cannot change the original deal.
B) Joe would lose because early repayment constituted consideration to support the new arrangement.
C) Joe would lose because of the rule that past consideration is no consideration.
D) Joe would win because his forgiveness of the loan was gratuitous, i.e. unsupported by consideration.
E) Joe would lose because of the doctrine of quantum meruit.

Question

Quizplus · Accepted Answer

Joe's offer to take $5,000 in full satisfaction of the debt and Sam's payment of $5,000 on January 5th constituted a new agreement. The early repayment of $5,000 was consideration to support the new arrangement, and therefore Joe cannot sue Sam for the $1,000 he originally forgave. This is known as the doctrine of accord and satisfaction.

Sam Owed Joe $6,000 Due January 12, 2012