Contracts I

Restatement Second of Contracts § 74


Settlement of Claims

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  1. Forbearance to assert or the surrender of a claim or defense which proves to be invalid is not consideration unless
    1. the claim or defense is in fact doubtful because of uncertainty as to the facts or the law, or
    2. the forbearing or surrendering party believes that the claim or defense may be fairly determined to be valid.
  2. The execution of a written instrument surrendering a claim or defense by one who is under no duty to execute it is consideration if the execution of the written instrument is bargained for even though he is not asserting the claim or defense and believes that no valid claim or defense exists.