A debtor owed a lender $1,500. The statute of limitations barred recovery on the claim. The debtor wrote to the lender, stating "I promise to pay you $500 if you will extinguish the debt." The lender agreed. Is the debtor's promise to pay the lender $500 enforceable? O Yes, because the debtor's promise provided a beniefit to the lender. O Yes, because the debtor's promise to pay part of the barred antecedent debt needs no consideration to be enforceable. O No, because the debtor made no promise not to plead the statute of limitations as a defense. O No, because there was no consideration for the debtor's promise.
A debtor owed a lender $1,500. The statute of limitations barred recovery on the claim. The debtor wrote to the lender, stating "I promise to pay you $500 if you will extinguish the debt." The lender agreed. Is the debtor's promise to pay the lender $500 enforceable? O Yes, because the debtor's promise provided a beniefit to the lender. O Yes, because the debtor's promise to pay part of the barred antecedent debt needs no consideration to be enforceable. O No, because the debtor made no promise not to plead the statute of limitations as a defense. O No, because there was no consideration for the debtor's promise.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:A debtor owed a lender $1,500. The statute of limitations barred recovery on the claim. The debtor wrote to the lender, stating.
"I promise to pay you $500 if you will extinguish the debt." The lender agreed.
Is the debtor's promise to pay the lender $500 enforceable?
O Yes, because the debtor's promise provided a beneft to the lender.
O Yes, because the debtor's promise to pay part of the barred antecedent debt needs no consideration to be enforceable.
O No, because the debtor made no promise not to plead the statute of limitations as a defense.
O No, because there was no consideration for the debtor's promise.
Transcribed Image Text:A car dealer owed a bank $10,000, due on June 1. The dealer subsequently sold a car to a buyer at a price of $10,000, payable
at $1,000 per month beginning on June 1. The dealer then telephoned the bank to ask whether the bank would accept
payments of $1,000 per month for 10 months beginning June 1, without interest, in payment of the dealer's debt to the bank.
The bank agreed to that arrangement, and the dealer then asked the buyer to make his car payments directly to the bank. When
the buyer tendered the first payment to the bank, the bank refused the payment, asserting that it would accept payment only
from the dealer. On June 2, the bank demanded that the dealer pay the debt in full immediately. The dealer refused to pay, and
the bank sued the dealer to recover the $10,000.
In this suit, which of the following arguments best supports the bank's claim for immediate payment?
O The dealer gave no consideration for the agreement to extend the time of payment.
The dealer could not delegate its duty to pay to the buyer.
O The agreement to extend the time for payment was not in writing
O The dealer's conduct was an attempted novation that the bank could reject
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