Question

Which of the following is true about a partial payment of a liquidated debt?

1) The rest of the debt is forgiven if the partial payment is accepted.
2) Liquidated debt is a product of fraud.
3) The debt remains outstanding.

Answer 1

A partial payment on a liquidated debt does not forgive the remaining debt unless there is a specific agreement to that effect. The correct option is 3.

Step-by-step explanation:

The question pertains to the effect of a partial payment on a liquidated debt, which is a common topic in the field of contract law. Accepting a partial payment on a liquidated debt does not automatically forgive the rest of the debt. The term 'liquidated debt' refers to a debt where the amount owed is fixed and undisputed.

The assertion that liquidated debt is a product of fraud is incorrect; liquidated debt is simply a debt with a specific, agreed-upon amount. Therefore, unless there is an agreement to the contrary, the debt remains outstanding even after a partial payment is accepted.