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accord and satisfaction

Accord and satisfaction is an enforceable agreement in which the parties agree to discharge a contract, claim, or obligation on terms that differ from the original terms of the contract, claim, or obligation.

In Delaware, accord and satisfaction is recognized as a legal means to settle a dispute where the parties agree to new terms that differ from the original contract. This concept is typically used when a debtor offers to pay a lesser amount than what is owed, and the creditor accepts this payment as full satisfaction of the debt. The new agreement, the 'accord,' and the execution of this agreement, the 'satisfaction,' must both occur for the original obligation to be discharged. The Uniform Commercial Code (UCC), which Delaware has adopted, specifically addresses accord and satisfaction in the context of negotiable instruments under Section 3-311. To be valid, the accord must be executed in good faith, with consideration, and with the intent to resolve a dispute. Once the satisfaction is completed, the original contract or obligation is considered settled, and the creditor cannot pursue further action on the original debt.

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Contracts

accord and satisfaction

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Delaware State Code

Delaware State Code

Contracts

accord and satisfaction

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