Asked by Tiffany Smith on Jul 30, 2024
Verified
In general,settlements of liquidated debts are not binding due to the absence of consideration,while settlements of unliquidated debts are a binding accord and satisfaction.As a matter of technical consideration law,what justifies this distinction?
Liquidated Debts
Debts for which the amount owed is known and agreed upon by all parties involved.
Unliquidated Debts
Unliquidated debts refer to obligations or claims for which the exact monetary value has not been determined, often pending further assessment or legal resolution.
Technical Consideration
Specific technical factors or details that are taken into account in the assessment or development of a project, product, or system.
- Explore the guidelines for the execution of commitments in the scenario of settling judicial claims or debts.
Verified Answer
ZK
Zybrea KnightJul 31, 2024
Final Answer :
In the settlement of a liquidated debt,the debtor is making a promise to perform a preexisting obligation (the debt),and therefore is not conveying legal value to the creditor.In the settlement of an unliquidated debt,this may not be so clear,because the amount of the debt is uncertain.More importantly,the debtor is giving up his right to have a court determine the real amount of the debt.This forbearance is legal value.
Learning Objectives
- Explore the guidelines for the execution of commitments in the scenario of settling judicial claims or debts.