Thereafter, Keith unsuccessfully sought to collect from George an alleged unpaid balance of $600. May Keith recover the $600 from George? Explain.
George owed Keith $800 on a personal loan. Neither the amount of the debt nor George’s liability to pay the $800 was disputed. Keith had also rendered services as a carpenter to George without any agreement as to the price to be paid. When the work was completed, an honest and reasonable difference of opinion developed between George and Keith with respect to the value of Keith’s services. Upon receiving from Keith a bill of $600 for the carpentry services, George mailed in a properly stamped and addressed envelope his check for $800 to Keith. In an accompanying letter, George stated that the enclosed check was in full settlement of both claims. Keith indorsed and cashed the check. Thereafter, Keith unsuccessfully sought to collect from George an alleged unpaid balance of $600. May Keith recover the $600 from George? Explain.
This is a case of settlement of an unliquidated debt. PersonsK and G had disputes about the amount of carpentryservices and personal loans. For this reason,Person G paid an amount of $800 in full settlement of both (the carpentry service and personal loan), and Person K accepted it.
Accepting a payment while stating full settlementin case of a valid dispute ends the dispute. After this,no party can file a suit.
Person K may not be able to recover the amount of $600 from Person Gas they have made a payment of $800 in full settlement, and Person K has indorsed the check.