What is the effect of a partial payment?

Partial payment is when a party does not fully satisfy their obligations outlined in a contract. In Hawaii, the effect of a partial payment relies heavily on the contract language and the parties’ negotiated terms of the agreement. Legally, if a party pays only a portion of what is due, the other party is not necessarily excused from their contractual obligations. However, such a payment can have an effect on the contract and can be characterized as a partial performance or payment. In Hawaii, whether the partial payment excuses the obligor from the remainder of their duty depends on the obligation in the contract. If the contract states that the payment must be made in full for the performance to be due, then the obligor can be excused from the remainder of their contractual duty. The courts will also examine other factors such as whether the party making the partial payment had reasonable grounds to believe they were able to carry out their obligation, and if the party receiving the payment was aware of the obligation’s deficiency. Partial payment can have various effects, ranging from it erasing the debt and discharging the obligor, to it not having any legal effect at all. In order to determine what the effect of a partial payment would be in a given contract, it is important to read the contract terms carefully and consult with a qualified attorney.

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What is the effect of a partial payment?

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