Accord and Satisfaction
Accord and satisfaction is a contract doctrine where parties agree to accept different performance (accord) than originally promised, and upon completion of that substitute performance (satisfaction), the original obligation is discharged.
Exam Tip
Accord = new AGREEMENT; Satisfaction = PERFORMANCE. Original duty not discharged until SATISFACTION.
What is Accord and Satisfaction?
Accord and satisfaction discharges obligations through substitute agreement and performance.
Two-Step Process
| Step | Effect |
|---|---|
| Accord | Agreement to accept substitute - suspends original |
| Satisfaction | Performance of accord - discharges original |
The Consideration Problem
| Debt Type | Consideration? |
|---|---|
| Disputed Claim | Yes - surrender of dispute |
| Unliquidated | Yes - amount uncertain |
| Undisputed Liquidated | No - part payment insufficient |
Effect of Breach
| Who Breaches | Consequence |
|---|---|
| Debtor | Creditor sues on original OR accord |
| Creditor | Debtor asserts accord as defense |
Study This Term In
Related Terms
Consideration (Contracts)
Consideration is the bargained-for exchange of legal value between parties that supports enforceability of a contract, requiring both a bargain (exchange) and legal detriment or benefit.
Promissory Estoppel
Promissory estoppel is an equitable doctrine that enforces a promise lacking consideration when the promisor should reasonably expect the promise to induce reliance, the promisee actually and reasonably relies, and enforcement is necessary to avoid injustice.
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