X owed Y $1,000. Under Ontario statute law if Y agrees to accept a lesser sum as payment in full then he can no longer make a claim for the full $1,000.

Question

X owed Y $1,000. Under Ontario statute law if Y agrees to accept a lesser sum as payment in full then he can no longer make a claim for the full $1,000.

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Question and options:
- Question: X owed Y $1,000. Under Ontario statute law if Y agrees to accept a lesser sum as payment in full then he can no longer make a claim for the full $1,000.
- Options: True, False

Analysis of each option:
Option 1: True
- At first glance, the idea behind an accord and satisfaction is that a debtor (X) offers less than the full amount and the creditor (Y) agrees to accept that lesser sum as full settlement, thereby releasing the debtor from the remaining balance. Some students recall that once a valid accord and satisfaction occurs, the original debt can be extinguished and the creditor cannot later claim the shortfall.
- However, this broader claim depends on proper formation of an accord and satisfaction: there must be a clear offer to settle for a lesser amount, acceptance by the creditor, and the new agreement must be supported by consideration or be otherwise legally effective (various jurisdictions require some form of consideration or fresh agreement for enforceability).
- In Ontario, as in many common-law systems, simply agreeing informally to “take less” does not automatically extinguish the entire claim unless there is a proper accord and satisfaction with the requisite elements. Special circumstances (such as disputes over the amount owed, whether the acceptance is clearly stated as full satisfaction, or whether there is sufficient consideration or a written release) can affect enforceability. Therefore, stating that the claim is invariably extinguished by such an agreement would be an overgeneralization.
- Misconception to watch for: assuming that any agreement to accept less automatically bars further claims without regard to formalities or the presence of consideration. A true accord and satisfaction requires more than a mere verbal agreement to settle for less in many cases.

Option 2: False
- This option holds that the proposition is not universally true and depends on the specifics of the accord: whether there is valid consideration, whether the creditor intends to release the claim, and whether the agreement meets the legal requirements for an accord and satisfaction in Ontario.
- The key nuance is that not all agreements to accept a lesser sum necessarily operate as a full release of the original debt. If the agreement lacks proper consideration, is not intended as a complete settlement, or If the creditor reserves the right to pursue the balance in writing, the original claim might still be viable. In other words, the mere act of offering or accepting less does not automatically extinguish the full claim in every legal scenario.
- Additionally, statutory nuances or case-law distinctions in Ontario can influence whether an accord and satisfaction is effective. The statement’s blanket claim ignores these potential contingencies and exceptions.

Putting it together:
- Both options require careful consideration of what constitutes a valid accord and satisfaction in Ontario law. The idea that accepting a lesser sum automatically prevents any further claim is an incomplete generalization. The correct understanding recognizes that the extinguishment of the balance depends on proper legal formation, consideration, and specific circumstances.
- Because the statement as given omits these critical conditions and thereby oversimplifies the legal result, the position asserted by the statement is not categorically correct in all Ontario contexts.

Note on phrasing:
- The reasoning above emphasizes that the outcome hinges on formal requirements for accord and satisfaction, which can vary by facts and the presence of proper release language or consideration. This nuanced view aligns with common-law practice where blanket assertions about full extinguishment are often misleading.

X owed Y $1,000. Under Ontario statute law if Y agrees to accept a lesser sum as payment in full then he can no longer make a claim for the full $1,000.

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