LAW1101 writing assignment #2 draft Nov 9, 2023
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1101
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Law
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Feb 20, 2024
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docx
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Uploaded by ProfField10219
TO: Julie Foster
FROM: Ayman Siddiki
RE: Settlement of Debt between Heidi Thompson and Elena Powell
DATE: 11/9/2023
Hello Ms. Foster,
You had requested that I research how our firm should deal with a legal matter regarding a client,
Heidi Thompson, and the settlement of her debt. As the information you provided states, our client, Heidi Thompson, borrowed $50,000 from her cousin on August 15, 2021, and had signed a contract which required her to pay the money in full back by August 15, 2023. Due to some financial issues Ms. Powell proposed new terms to the contract wherein she agreed to accept $20,000 as payment in full if it was paid within May 15, 2023. Upon Ms. Thompson wanting to make the new terms concrete by putting them in written format; she was told by Ms. Powell that since they are family her word is good. Ms. Powell also indicated that she was offended by Ms. Thompson wanting to put the terms in writing as it suggested that Ms. Powell could not be trusted.
From my research and the facts stated above, this matter can be identified as a case of undisputed
debt/liquidated debt. A liquidated debt is a debt in which neither the existence nor the amount is disputed by either party. In general, a fully matured (debt is past due) liquidated debt cannot be discharged for any amount less than the original amount the parties agreed upon even if the creditor verbally discharges the debt, as it was a pre-existing legal obligation for the debtor to pay the creditor back. Exceptions are if the creditor accepts new or different considerations to discharge the debt, or the debtor gets a signed writing from the creditor to discharge the balance of the debt, or the debt is not due yet and therefore is not fully mature.
With the matter at hand, there was no debate between the two parties regarding the amount or the
existence of the debt. From the facts we can also determine that the debt is not fully mature yet, since the creditor, Ms. Powell, needs the money early. Since the debt is not fully mature yet, it can be discharged for an amount less than the original. Furthermore, Ms. Thompson did not have
a pre-existing legal obligation to pay the amount by May 15, 2023, she was bound by the law to pay at a later date. Therefore, there is enough consideration from Ms. Thompson for it to be valid
and counted as payment in full satisfaction if she agrees to Ms. Powell’s new terms. In this case it does not need to be in writing to be enforceable and judgement would be in favor of Ms. Thompson if Ms. Powell decided to sue for the remaining money afterwards.
Please let me know if you have any further questions or concerns.
Best,
Ayman Siddiki
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