Question

Able borrowed $10,000 from Baker, promising to return it with $1,000 interest on January 1,

2006. There is no dispute that Able owes Baker $11,000 due on January 1, 2006. On that day,
Able gave Baker a valid check in the amount of $10,500 marked "payment in full for loan due
January 1, 2006." Baker accepted that check and deposited it into his account. If Baker then
sues Able for the unpaid $500, what would the result be?

Answer 1

If Baker sues Able for the unpaid $500, the result would depend on the legal concept of 'accord and satisfaction.' Baker would have to prove that he intended to accept the check as full payment and that Able was aware of this intent.

Step-by-step explanation:

If Baker sues Able for the unpaid $500, the result would depend on the legal concept known as 'accord and satisfaction.' If Baker sues Able for the unpaid $500, the result would depend on the legal concept of 'accord and satisfaction.' Baker would have to prove that he intended to accept the check as full payment and that Able was aware of this intent.

In this case, by accepting and depositing Able's check marked 'payment in full,' Baker might be accepting it as a full settlement of the debt. However, to enforce this, Baker would have to prove that he intended to accept it as full payment and that Able was aware of this intent. If Baker fails to prove these elements, he may still be able to pursue legal action to recover the remaining $500.