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Why Restatement (Second) of Contracts is a Vital Resource for Independent Contractors
Many of us are contending to manifest our dreams through business, commerce, and collaboration with other creative minds, but to do so successfully we must establish valuable relationships.
Have you ever entered into a relationship with an individual or business and felt that a verbal agreement would suffice, only to find out some time later that said individual or business had a different interpretation or memory of the agreement than you? The result of this can cause a loss of valuable time and money, resulting in frustration and the all-too-often finger pointing at the other party for failure to perform their duties and obligations under the agreement. See More...
When Taking an Instrument Discharges an Obligation
According to Modern Commercial Paper 147 (1994), "Taking an instrument discharges the underlying debt when the parties to the deal agree to this effect. 3-310(b) ("Unless otherwise agreed * * *"). Such an agreement, which is very rare, is effective to discharge the underlying obligation regardless of the nature or kind of instrument that is taken, even if it is an ordinary note or check of the person who is the issuer of the instrument and the underlying obligor."
The first question that may come to mind when considering the above citation is, "how can a negotiable instrument be used to create the income necessary to pay off the debt." In other words, why would a creditor agree to take a negotiable instrument in satisfaction of a debt obligation? Isn't that a bit unreasonable? After all negotiable instruments such as promissory notes are often used in mortgages and deed of trust agreements in order to suspend payment of an obligation so that a borrower can receive possession of the real property before it is paid for. In such circumstances the borrower issues a negotiable instrument to the lender, and, by its terms, the principle amount of that promise, plus interest, has to be paid back in installments over the course of many years...Perhaps many can comprehend how the issue of a promissory note in a mortgage or deed of trust agreement can suspend the debt obligation, which would otherwise become due at the time the borrower wishes to purchase the house, but it is not commonly understood just how a promissory note could be tendered as payment to fully satisfy and discharged an obligation.
The underlying effect of suspension vs discharge may depend on the design and function of the negotiable instrument itself. It is the function that is greatly examined in our latest webinar, "Gnostic Methods of Debt Settlement".