Rona borrowed $2000 from Finance Ltd. The agreement was that capital interest (an additional $500)...

Question

Rona borrowed $2000 from Finance Ltd. The agreement was that capital interest (an additional $500) was payable on 30 November. Shortly after arranging the loan, Rona lost her job and is till unemployed.

Advise Rona in each if the following situations:

On 10 November Rona approaches the company saying: “I have scraped up $2000 but that is all I have. If you will take that in full satisfaction you can have it now”. The company agrees, Rona pays the money and the company then demands the balance.

On 30 November Rona informs the company that she will sell her car if the company will take the proceeds in lieu of the amount owed. The company agrees, Rona sells the car for $2000, pays the money over and then receives a demand for the balance.

The same facts as (b), except that Rona transfers the car to the company, the company sells it and then demands the balance.

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Robert · Accepted Answer

1. (a) Rona can sue the company because agreeing with the terms is a form of acceptance 
and since Rona said that she can just pay $2000 as full settlement and company agrees to 
it means now she is not supposed to pay balance, but the company demand it after Rona 
paid the company $2000, Rona can file the case against company. 
(b) The company’s demand is valid; Rona has to pay the company the balance amount 
because she didn’t said that she will only pay the price she will get from the sale of car as 
full settlement, she just said that she will have to sell the car if company wants the 
proceeds means she will pay the principal amount and interest.  
(c) Rona is not liable to pay the balance because she and company entered into a new 
contract that Rona will transfer her car to the company as the settlement of total proceeds. 
Now the company sells it for $2000 is company’s matter Rona is liable to pay any 
balance to company. (Geoff Monahan)
2.

Rona borrowed $2000 from Finance Ltd. The agreement was that capital interest (an additional $500) was payable on 30 November. Shortly after arranging the loan, Rona lost her job and is till...

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