Final answer:
The settlement of an unliquidated debt is known as 'accord and satisfaction,' a process where parties agree to settle a disputed debt by changing the terms and the debtor fulfilling these new terms.
Step-by-step explanation:
The settlement of an unliquidated debt is called an accord and satisfaction. An unliquidated debt refers to a debt whose amount has not been determined or fixed, often due to a dispute between the parties over the amount owed or the terms of the agreement. When they reach an agreement to settle the debt for an amount different from what was originally claimed, the new agreement is the accord, and the payment (or other performance) that discharges the debt is the satisfaction. Essentially, it is a legal agreement to compromise on a debt that is in dispute, where the creditor agrees to accept less than the full amount or something different in satisfaction of the full debt, and the debtor agrees to this new term to settle the obligation. This is a common practice in business and law and can be a more amicable way to resolve disputes without going to court.