XYZ Company, a Distributor of Auto Parts, Is in Debt

question 16

Multiple Choice

XYZ company, a distributor of auto parts, is in debt to the bank for $35,000, due on February 25, 2017. The company is having difficulties and wants to negotiate with the bank to pay only $33,000 as payment in full. With these facts in mind, which of the following statements is false?

• A) If the bank agrees to accept the $33,000 as payment in full if paid early, by February 15, and the company does as requested, the bank could not later sue for the remainder because the company gave good consideration for the bank's forgiveness of the debt.
• B) At common law, if the bank accepted the $33,000 as payment in full, even absent additional consideration, it could not later sue for the remainder because such promises are always binding.
• C) If the company obtained from the bank the bank's promise to forgive the $2000 under seal, the bank could not later sue for the remainder.
• D) In some jurisdictions, a statutory provision provides that the creditor who accepts less than full payment as payment in full cannot later sue for the remainder.
• E) So long as they don't take the money, the bank can still sue for the entire amount.

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Definitions:

Perceptual Selection

The psychological process by which individuals screen and select various stimuli that vie for their attention, filtering out some data while allowing other data to enter perception.

Contrast

The state of being strikingly different from something else in juxtaposition or close association.

Intensity

Refers to the degree of strength, force, or energy possessed by a process, phenomenon, or emotion.

Perceptual Selection

The process by which individuals choose which sensory information to focus on, influenced by factors such as interests and backgrounds.