In General,settlements of Liquidated Debts Are Not Binding Due to the Absence

question 8

Essay

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?

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Definitions:

Proceeds

The amount of money received from a transaction, often used in the context of sales or the disposition of assets.

Debt Restructure

The process of renegotiating the terms of existing debt agreements to provide a more favorable outcome for the borrower, potentially including changes to interest rates, repayment schedules, or the amount owed.

Future Cash Flows

Estimates of the amount of money expected to flow in and out of the business in the future.

Book Value

The net value of a company's assets minus its liabilities, as recorded on the balance sheet.