Note Repayment: 

Gina Gigabyte borrowed $500,000 (interest-free) from Sall Brine in April 2015 & used the money for start-up costs for her newly successful music app business. Gigabyte signed the attached Promissory Note in which she agreed to repay the $500,000 loan on May 31, 2016.

Brine has had some recent financial difficulties, is in need of cash, and telephoned Gigabyte and made the following offer. Brine promised that if Gigabyte pays Brine $400,000 by December 30, 2015, Brine will accept $400,000 in full satisfaction of Gigabyte's obligation to pay $500,000.

Gigabyte is very interested in the proposal. Although she will have to struggle a bit to pay the money back now, it would be worth it to her if she can be certain that she would be able to save $100,000 by paying $400,000 by December 30, 2015. Gigabyte wanted Brine to put her promise in writing, but when she suggested it, Brine said that her word was good and was offended that Gigabyte would suggest that she could not be trusted.

Gigabyte has asked for your advice as to whether she should accept Brine's offer. What is a proper prepared memo to Gigabyte advising her on this matter? Your memo should specifically deal with and explain the issues of (1) whether Brine's promise will be binding and enforceable and (2) whether the fact that her promise will not be in writing will be a problem.

Use appropriate legal terminology but also explain this clearly since Gigabyte has no legal background in law.

PROMISSORY NOTE: 

$500,000

April 15, 2015

New York, NY

For value received, I, Gina Gigabyte, of 371 Nagle Avenue, Apartment 6D, New York, New York County, New York, promise to pay to Sally Brine at 4531 Fifth Avenue, New York, New York, on May 31, 2016, the sum of $500,000 with interest at the rate of 0% annually.

(Her Signature)

Gina Gigabyte