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Nancy owed Sharon $1,500, but Sharon did not initiate a lawsuit to collect the debt within the time prescribed by the statute of limitations. Nevertheless, Nancy promises Sharon that she will pay the barred debt. Thereafter, Nancy refuses to pay. Sharon brings suit to collect on this new promise. Is Nancy’s new promise binding? Explain. |
Explanation
The Statute of Limitations contains an exception regarding payment of past consideration. Payment of past consideration is a liability to the party, which must be fulfilled. The new promise made by the party will be binding according to the new terms, and collection of payment can be made accordingly.
Verified Answer
In this case,Individual N's new promise to pay the time-barred debt can be binding as barred debt is applicable under the statute of limitations.
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