What is ACCORD AND SATISFACTION? Definition of ACCORD AND SATISFACTION in Black's Law Dictionary
An agreement between two persons, one of whom has a right of action against the other, that the latter should do or give, and the former accept, something in satisfaction of the right of action different from, and usually less than, what might be legally enforced.
When the agreement is executed, and satisfaction has been made, it is called "accord and satisfaction." Rogers v. Spokane, 9 Wash. 168, 37 P. 300.
It is discharge of contract, or of disputed claim arising either from contract or from tort, by substitution of agreement between parties in satisfaction of such contract or disputed claim and execution of the agreement. Nelson v. Chicago Mill & Lumber Corporation, C.C.A.Ark., 76 F.2d 17, 100 A.L.R. 87.
"Accord and satisfaction" results where there is assent to acceptance of payment in compromise of dispute, or in extinguishment of liability uncertain in amount, or where payment, coupled with condition whereby use of money will be wrongful if condition is ignored, is accepted. Hudson v. Yonkers Fruit Co., 258 N.Y. 168, 179 N.E. 373. Regardless of whether claim is liquidated or unliquidated. May Bros. v. Doggett, 155 Miss. 849, 124 So. 476, 478.
Settlement of claims under insurance policies. Lehaney v. New York Life Ins. Co., 307 Mich. 125, 11 N.W.2d 830, 832.
Accepted amount tendered by insurer as cash surrender value of policies. Greenberg v. Metropolitan Life Ins. Co., 379 Ill. 421, 41 N.E.2d 495, 497, 140 A.L.R. 775.
See, also, Sierra & San Francisco Power Co. v. Universal Electric & Gas Co., 197 Cal. 376, 241 P. 76, 80.
More recently, a broader application of the doctrine has been made, where one promise or agreement is set up in satisfaction of another. Continental Nat. Bank v. McGeoch, 92 Wis. 286, 66 N.W. 606.
An "accord and satisfaction arises" where parties, by a subsequent agreement, have satisfied the former one, and the latter agreement has been executed. The execution of a new agreement may itself amount to a satisfaction, where it is so expressly agreed by the parties ; and without such agreement, if the new promise is founded on a new consideration, in which case the taking of the new consideration amounts to the satisfaction of the former contract.
A dispute or controversy is not an essential element of some forms of accord and satisfaction, as an accord and satisfaction of a liquidated claim by the giving and acceptance of a smaller sum and some additional consideration, such as new security, payment of the debt before due, payment by a third person, or where property or personal services are accepted from an insolvent debtor in satisfaction. Burgamy v. Holton, 165 Ga. 384, 141 S.E. 42, 47.
"Composition settlement" contemplates agreement not only between debtor and creditors, but also among creditors, whereas "accord and satisfaction" is agreement between debtor and single creditor. Russell v. Douget, La.App., 171 So. 501, 502.
"Novation" is a species of "accord and satisfaction". Munn v. Town of Drakesville, 226 Iowa 1040, 285 N.W. 644, 648.
See Acceptance; Composition; Compromise; Novation.
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AGREEMENT
ACRE RIGHT
ARTICLES OF AGREEMENT
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