Question

Which of the following is true regarding the general rule in regard to the treatment of liquidated debts as opposed to unliquidated debts?

• That a promise to discharge a liquidated debt for part payment of the debt at or after its due date is unenforceable due to lack of consideration but that a promise to settle an unliquidated debt is enforceable.

• That a promise to discharge a liquidated debt for part payment of the debt at or after its due date is enforceable and supported by consideration and that a promise to settle an unliquidated debt is enforceable.

• That a promise to discharge a liquidated debt for part payment of the debt at or after its due date is enforceable and supported by consideration but that a promise to settle an unliquidated debt is unenforceable.

• That a promise to discharge a liquidated debt for part payment of the debt at or after its due date is unenforceable due to lack of consideration and that a promise to settle an unliquidated debt is unenforceable.

Answer 1

Your required answer is option A i.e. That a promise to discharge a liquidated debt for part payment of the debt at or after its due date is unenforceable due to lack of consideration but that a promise to settle an unliquidated debt is enforceable

Explanation:

A liquidated debt is one that is due and certain whcih means there is no dispute about the existance or amount of the debt. The general rule in regard of liquidated debts is That a promise to discharge a liquidated debt for part payment of the debt at or after its due date is unenforceable due to lack of consideration but that a promise to settle an unliquidated debt is enforceable.

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