Sam Owes $5,000 to the First National Bank for a Student

Multiple Choice

Sam owes $5,000 to the First National Bank for a student loan which will come due on January 1 next year. He has been offered a two-year graduate fellowship, but he will not be able to pay the loan back if he accepts the fellowship. The bank manager tells Sam that if he pays $3,000 now, they will forgive the loan. Should Sam accept the offer?

A) No, because the bank can still sue for the remaining $2,000.
B) No, because the manager's promise is not binding on the bank.
C) Yes, because the early payment of the loan is consideration that makes the bank's promise binding.
D) Yes, because the bank must do whatever the manager says.