Which of the following is true regarding the effect of a debtor offering to pay less money than is owed as full payment on a debt when the debt itself, in its entirety, is in dispute, and the creditor agrees?
A) A liquidated debt is involved, and there is an accord and satisfaction.
B) A liquidated debt is involved, and there is an accord but no satisfaction.
C) A liquidated debt is involved, and there is neither a satisfaction nor an accord.
D) An unliquidated debt is involved, and there is an accord and satisfaction.
E) An unliquidated debt is involved, and there is an accord but not satisfaction.

Question

Quizplus · Accepted Answer

When a debtor offers to pay less than the full amount owed and the creditor agrees, especially when the debt amount is in dispute (meaning the exact amount owed is not agreed upon by both parties), it is considered an unliquidated debt. The agreement to accept less as full payment constitutes an "accord," and the actual payment is the "satisfaction." Thus, there is both an accord and satisfaction, which resolves the dispute over the unliquidated debt.

Which of the Following Is True Regarding the Effect of a Debtor