Sam owed Joe $6000,due January 12,2012.On January 1,Joe said he'd take $5000 in full satisfaction of the debt if Sam paid him $5000 on January 5th instead.Sam paid on January 5th.A week later,Joe wants to sue Sam for the $1000 he (Joe)was legally owed.Which of the following is true?
A) Joe would win because his forgiveness of the loan was gratuitous-i.e., unsupported by consideration.
B) Joe would win because they cannot change the original deal.
C) Joe would lose because of the doctrine of quantum meruit.
D) Joe would lose because of the rule that past consideration is no consideration.
E) Joe would lose because early repayment constituted consideration to support the new arrangement.

Question

Quizplus · Accepted Answer

The early repayment of $5000 constitutes consideration to support the new arrangement that Joe offered to Sam. Therefore, the new agreement is binding, and Joe cannot sue Sam for the remaining $1000. The pre-existing duty rule is not applicable here because there was a new agreement supported by consideration.

Sam Owed Joe $6000,due January 12,2012