What is COMPOSITION? Definition of COMPOSITION in Black's Law Dictionary - Legal dictionary - Glossary of legal terms.
An agreement, made upon a sufficient consideration, between an insolvent or embarrassed debtor and his creditors, whereby the latter, for the sake of immediate or sooner payment, agree to accept a dividend less than the whole amount of their claims, to be distributed pro rata, in discharge and satisfaction of the whole. Bank v. McGeoch, 92 Wis. 286, 66 N.W. 606; Pioneer Minerals Corporation v. Larabic Bros. Bankers, 99 Mont. 358, 43 P.2d 884, 886.
"Composition" should be distinguished from. "accord." The latter properly denotes an arrangement between a debtor and a single creditor for a discharge of the obligation by a part payment or on different terms. The former designates an arrangement between a debtor and the whole body of his creditors (or at least a considerable proportion of them) for the liquidation of their claims by the dividend offered.
Ancient Law
Among the Franks, Goths, Burgundians, and other barbarous peoples, this was the name given to a sum of money paid, as satisfaction for a wrong or personal injury, to the person harmed, or to his family if he died, by the aggressor. It was originally made by mutual agreement of the parties, but afterwards established by law, and took the place of private physical vengeance.
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That's the definition of COMPOSITION in Black's Law Dictionary - Legal dictionary - Glossary of legal terms. Courtesy of Cekhukum.com.
