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 Posted: Wed Jun 27, 2007 3:50 pm Subject: payment refusal |
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If a creditor refuses to accept payment on a loan what rights do I have, and what federal statute covers me?
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gailchris
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| Posted: Wed Jun 27, 2007 4:03 pm Subject: |
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First, please let us know what company is this? Do you have a binding contract signed with them?
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Bony
Joined: 22 Oct 2005
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| Posted: Thu Jun 28, 2007 7:24 pm Subject: |
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That is a material breech of the contract and is considered prevention of performance ... they are preventing you from fulfilling your duties.
Below are some quotes from a law book I have. Unfortunately, I don't have exact references to the actual laws regarding contracts:
| Quote: | A restatement of the Code of Civil Law regarding contracts, under heading Discharge by Performance, states that:
“Tender is an offer by one party – who is ready, willing, and able to perform – to the other party to perform his obligation according to the terms of the contract. Under a bilateral contract, the refusal or rejection of a tender of performance may be treated as a repudiation that excuses or discharges the tendering party from further duty of performance under the contract.”
Furthermore, under heading Prevention of Performance, the Code states, “One party’s substantial interference with or prevention of performance by the other generally constitutes a material breech that discharges the other party to a contract.” |
The Uniform Commercial Code (UCC 3-603) further states that “If tender of payment of an obligation to pay an instrument is made to a person entitled to enforce the instrument and the tender is refused, there is discharge, to the extent of the amount of the tender … with respect to the obligation to which the tender relates.”
If the creditor filed suit against you, then you could easily assert a positive defense on grounds that 1) the presentment of your payment to the creditor is a tender to perform obligations under the contract; 2) refusal of tender by the creditor is a repudiation that excuses further performance of debtor on the contract; and 3) preventing the obligor from tendering payment constitutes a material breech that discharges the obligor from the contract.
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DebtCruncher
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