he impliedly promises to free debtor of any remaining balance If creditor

He impliedly promises to free debtor of any remaining

This preview shows page 8 - 11 out of 34 pages.

he impliedly promises to free debtor of any remaining balance If creditor crosses out and writes “under protest” and deposits check, doesn’t matter because it implies acceptance Liquidated debts – no genuine basis for a good faith dispute as to the existence or amount of indebtedness (e.g. sales transaction) o Compromise agreements less frequently binding because debtor had “pre-existing duty” to pay Compromising agreements o Composition agreements – debtor makes agreement with tow or more creditors, under terms of which he or she agrees to pay each creditor who joins in agreement a stated percentage of that person’s claim with creditors agreeing in return to accept percentage as full satisfaction of their claims; binding even though creditors each receives a sum less than originally owed Special Situations Promissory Estoppel “Justifiable reliance” o Promisor makes a promise under circumstances in which he or she should realize that the promisee is almost certainly going to rely on the promise in a particular way, and if promisee does so rely, thereby causing a substantial change in his or her position, promisor is bound by promise Formal Promises to Charitable Institutions Courts enforce promises to charities by: o Invention of consideration, by finding that each donor’s promise is made in consideration of the promises of other donors o Promissory estoppel, by finding that donors should foresee that donee institution will rely on promised gift, for example, by drawing up plans and beginning construction o Where all else fails, many courts will simply enforce promise on grounds of public policy Promises Made Subsequent to the Running of a Statute of Limitations Statues of limitations – limits time a creditor has in which to bring suit against debtor after debt becomes due; contract becomes unenforceable after time limit
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New promise to pay (in all or a portion of original debt) o Enforceable if in writing; debt considered “revived” and creditor has new statutory period Part payment or acknowledgement o If debtor sends partial payment or acknowledges debt exist after statute of limitations, obligations to pay is revived and creditor has another 5 years to commence legal action for balance
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Chapter 13 Illegality Courts do not generally enforce illegal contracts Contracts are illegal bc: o Contrary to state’s statutes and regulations o Contrary to public policy of state as defined by court Illegal contracts are void meaning: o In cases where contract is entirely executory, neither party is bound by agreement o In cases where one of parties has performed his or her part of the bargain, such party cannot recover consideration or value of consideration that has passed to other party Contracts Contrary to Statutes Wagering Agreements Gambling contracts void Bets and lotteries – ok within narrow limit Insurance contracts o Risk-shifting contracts – enforceable because owner had “insurable interest” prior to taking out policy o
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