Composition Legal Definition

A standard form is not required for a settlement with creditors to be valid. A debtor may enter into individual agreements with each creditor if it is clear that each has a common goal. Not all creditors of a debtor are required to accept a settlement. Those who do not participate are not bound by it. The Legal Site No. 1 in Spanish for consumers A settlement with creditors is not the same as an agreement or assignment in favor of creditors. Unlike an agreement, which is an agreement between a debtor and a single creditor on the performance of an obligation by partial payment, a settlement is an agreement between a debtor and a number of creditors acting jointly for the liquidation of their claims. Are you a lawyer? Visit our professional site » Like any contract, a settlement with creditors must be accompanied by consideration to be enforceable. The promise of each creditor to accept a proportionate share of the partial payment, as opposed to the full payment of the due amount, is consideration for the other creditors and the debtor. The waiver of the debtor`s right to file an application for insolvency is considered consideration for creditors. COMPOSITION, contracts. An agreement concluded in return for sufficient consideration between a debtor and a creditor whereby the creditor accepts part of the debt to which he is entitled in order to satisfy the whole. Montagu on Compos.

1; 3 Co. 118; Co. Litt. 212, b; 4 Mod. 88; Str. 426 1; 2 T. R. 24, 26; 2 chit. Rs 541, 564; 5 D. & R. 56 3 B.

& C. 242; 1 R. & M. 188; 1 B. & A. 103, 440; 3 Moores R. 11; 6 R. T. 263; 1 D. & R. 493; 2 campb.

R. 283; 2 M. & S. 120; 1 N. R. 124; Harr. Dig. Certificate VIII. 2. In England, compositions were allowed for crimes and misdemeanours, even for murder. But these compositions are no longer allowed, and even an action that tam can not be legally composed. Ferry.

Blood type. Actions qui tam, See 2 John. 405; 9 John. 251; 10 John 118; 11. John. 474; 6 N. H.- Rep. 200.

A settlement with creditors generally benefits a debtor more than a bankruptcy because it achieves the same objective – the settlement of all or most of a debtor`s debts – without the stigma of bankruptcy. Unlike bankruptcy debt relief, a settlement does not exclude future insolvency for six years. However, creditors are often reluctant to enter into a settlement, and those who refuse to do so are not affected by its terms. Nationalwide Lawyers` Directory and Legal Consumer Resources The FindLaw Legal Dictionary – free access to over 8260 definitions of legal terms. Search for a definition or browse our legal glossaries. Substance formed by the mixture of two or more constituents. A composition has new properties that are not found separately in these ingredients. 35 United States of America A model creditor settlement form can be found above. Failure to comply with the terms of a regulation is the basis for prosecution for breach of the agreement. The debtor is released from the obligation to pay only if he has complied with the provisions relating to payment. All debts that are part of a settlement will be cancelled once the settlement is complete. However, a distinction must be drawn between an arrangement between creditors and an arrangement which falls within the jurisdiction of a court.

The former is fully regulated by creditors, while the latter is supervised by the court. Through judicial supervision, creditors benefit from better protection against fraud and greater certainty that their interests are protected. However, a court settlement requires litigation, which often charges the debtor additional fees that can affect their ability to execute the agreement or even reduce the amount they can accept. Out-of-court settlement has therefore become the preferred procedure. An agreement concluded after sufficient consideration between an insolvent or embarrassed debtor and its creditors, according to which they undertake, in the interest of immediate payment, to accept a dividend lower than the total amount of their claims, which must be distributed on a pro rata basis, for the execution and satisfaction of the whole. Bank v. McGeoch, 92 Wis. 286, 66 N. W. 606; Crossley v.

Moore, 40 N.J. Law, 27; Crawford vs. Krueger, 201 Pa. 348, 50 Atl. 931; In re Merriman`s Estate, 17 Fed. Cas. 131; Chapman v. Mfg. Co., 77 Me. 210; In re Adler (D.

C) 303 Fed. 444. “Composition” should be distinguished from “match”. The latter rightly refers to an agreement between a debtor and a single creditor on the performance of the obligation by means of partial payment or on different terms. The first rejects an agreement between a debtor and all of its creditors (or at least a significant part of them) on the liquidation of their claims through the dividend offered. In the old law. Among the Franks, Goths, Burgundians and other barbarian peoples, it was the name given to a sum of money paid by the aggressor as satisfaction for injustice or bodily harm to the injured person or his family at the time of his death. It was originally made by mutual agreement of the parties, but was later established by law and replaced private physical revenge. Certificate of composition. An agreement that contains the terms of a settlement between a debtor and its creditors. Composition in the event of bankruptcy.

An agreement between a bankrupt debtor and its creditors, according to which the amount it is expected to pay is liquidated and it can keep its assets on the condition that it makes the agreed payments. Composition of the material. In patent law. Chemical mixing or combination of materials. Goodyear v. Railroad Co., 10 Fed. Cas. 664; Cahill vs Brown, 4 Fed. Cas. 1005; Jacobs vs.

Baker. 7 walls. 295, 19 L. ed. 200. Composition of the tithe or actual composition. This follows in English canon law when an agreement is concluded between the owner of a land and the holder of a sinecure, with the consent of the Order and the patron, according to which the land will be exempted from the payment of tithe for the future on the basis of land or other real compensation granted in place and its satisfaction. 2 Bl. Komm.

28; 3 Steph. Come 129. A settlement with creditors is an agreement not only between the debtor and the creditors, but also between the creditors themselves, to accept less than what is due to everyone. This is a contract, and such an agreement is largely subject to contract law. There must be a meeting of minds or a mutual agreement between the debtor and the creditors before a regulation is created. The debtor must accept an offer from creditors to accept partial payment of the unpaid amounts for the arrangement to be binding. Creditors themselves must also agree on the amount they will accept to satisfy their claims.