Accords and Satisfactions

Question 1

Accord

Answer 1

An accord is an agreement in which one party to an existing contract agrees to accept, in lieu of the performance that he is supposed to receive from the other party, some other, different performance. Generally, an accord must be supported by consideration, but the consideration may be of a lesser value than the originally bargained-for consideration in the prior contract, as long as it is of a different type or the claim is to be paid to a third party. An accord and satisfaction generally may be accomplished by tender and acceptance of a check marked “payment in full” where there is a bona fide dispute as to the amount owed. A valid accord, taken alone, does not discharge the prior contract. It merely suspends the right to enforce it in accordance with the terms of the accord contract. The performance of the accord agreement (satisfaction) discharges not only the accord agreement but the original contract as well. Where the accord agreement is breached by the creditor by suing on the original contract, the debtor may seek to have the action enjoined by raising the accord agreement as an equitable defense.

Question 2

Satisfaction

Answer 2

Satisfaction is performance of an accord.