accord and satisfaction meaning
Noun: accord and satisfaction
- The settlement of a debt by paying less than the amount demanded in exchange for extinguishing the debt
Type of: settlement
Encyclopedia: Accord and satisfaction
The purchase by one party to a contract of a release from his obligations under it when the other party has already performed his side of the bargain. A release of this one-sided nature constitutes a unilateral discharge of the contract; unless granted by deed, it can at common law be effected only by purchase, i.e. by a fresh agreement (accord) for which new consideration (satisfaction) is given. If, for example, A is due to pay ￡1000on a particular date to Bbfor contractual services rendered, B might agree to accept ￡900 paid on an earlier date, the earlier payment constituting satisfaction. Compare BILATERAL DISCHARGE. See also (PROMISSORY) ESTOPPEL.
- An exception to this rule holds for settlements, such as an accord and satisfaction.
- Traditional court rulings have treated the tender of the check as the offer of an accord and satisfaction.
- An exception to the rule of adequacy is money, whereby a debt must always be paid in full for " accord and satisfaction ".
- Gamble of course argued that the banking of the cheque was accord and satisfaction for the account and denied any liability for the remaining balance.
- If the lender agrees to reduce the closing costs by an extra $ 1000 and the borrowers agree, then there has been an accord and satisfaction.