1. Junior owes creditor Iba $1,000, which is due and payable on June 1. Junior has been in a car accident, has missed a great deal of work, and consequently will not have the funds on June 1. Junior's father, Fred, offers to pay Iba $1,100 in four equal installments if Iba will discharge Junior from any further liability on the debt. Iba accepts. Is this transaction a novation or an accord and satisfaction? What if Fred defaults on his payments to Iba? Who can Iba sue if she does not receive payment? Explain. Does this transaction have the required contractual consideration?

Question

Blake Bradford

Business

23 November, 04:00

1. Junior owes creditor Iba $1,000, which is due and payable on June 1. Junior has been in a car accident, has missed a great deal of work, and consequently will not have the funds on June 1. Junior's father, Fred, offers to pay Iba $1,100 in four equal installments if Iba will discharge Junior from any further liability on the debt. Iba accepts. Is this transaction a novation or an accord and satisfaction? What if Fred defaults on his payments to Iba? Who can Iba sue if she does not receive payment? Explain. Does this transaction have the required contractual consideration?

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Bumpkin · Answer 1

Answer:Accord and satisfaction

In novation there might be a reduction in the original obligations buy in Accord and satisfaction there is payment of additional sum which is agreed as a discharge of obligations once settled.

2. Iba will sue Fred father for he has entered into a new contract which he gave a consideration of $100 and received a consideration of his son been freed from obligations and extended period of payments.