November 06, 2004
Voluntary payment rule explained
The Voluntary Payment Rule is an equitable defense based on the general common law rule that a person cannot recover money which he has voluntarily paid with full knowledge of the facts. The Rule charges the claimant with knowledge of the law, even arcane law such as tax law.
Bettino points out that the rule was used to throw out a case challenging an early lease termination fee as a penalty under Article 2A, because the lessee had already paid the fee.
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