Q&As

Will acceptance of part payment of an outstanding debt made expressly in full and final settlement result in a binding settlement of the entire claim with the result that the claimant cannot pursue the defendant for the balance of the debt due?

read titleRead full title
Published on LexisPSL on 06/04/2016

The following Dispute Resolution Q&A provides comprehensive and up to date legal information covering:

  • Will acceptance of part payment of an outstanding debt made expressly in full and final settlement result in a binding settlement of the entire claim with the result that the claimant cannot pursue the defendant for the balance of the debt due?

For the purposes of this Q&A it is assumed that one party has made a claim for a disputed debt.

According to Atkin’s Court Forms, vol 12(1), para 108, acceptance of part payment of a debt does not give rise to a binding agreement that the debtor is discharged from its liability to pay the full amount due to the creditor because there is no consideration passing between the debtor and creditor unless, by some additional term, consideration passes from the debtor in return for the creditor's forbearance in not pursuing the claim.

Where acceptance of part pay is accompanied by the debtor agreeing to act in some other way to his detriment, this will be an enforceable compromise of a claim for the full amount of a debt. Further, if a debtor offers to pay part only of the amount he owes, where the creditor voluntarily accepts that offer, and, in reliance on the cred

Related documents:

Popular documents