The accord is the agreement to accept different performance, and the satisfaction is its execution. Both are required, since an unexecuted accord leaves the original obligation enforceable.
A bona fide dispute is generally required.
Alternative Names:
Contract Accord and Satisfaction|Satisfaction of Disputed Claim
Why it Matters?
The bona fide dispute requirement is what distinguishes accord and satisfaction from a partial payment that discharges nothing, since paying less than an undisputed liquidated amount provides no consideration for the discharge. Where the amount is genuinely disputed, tender conditioned on full satisfaction and acceptance completes the discharge. Depositing a check marked as full satisfaction can constitute acceptance, though several states now require conspicuous notation and permit reservation of rights.
Frequently Confused with
Related terms
Frequently asked questions
Why is a bona fide dispute required?
Does depositing a full satisfaction check discharge the debt?
