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Contracts

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 Pennsylvania, 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 performance of it, the 'satisfaction', must both occur for the original obligation to be discharged. The accord must be a definite offer of different terms by one party, and the satisfaction is the execution of those terms, such as the payment of the agreed-upon amount. Under Pennsylvania law, for an accord and satisfaction to be valid, there must be a bona fide dispute regarding the original obligation, the creditor must voluntarily accept the offer, and the acceptance must be unequivocal. If these conditions are met, the accord and satisfaction can be used as a defense in a lawsuit for the original claim. This is governed by both Pennsylvania case law and the Uniform Commercial Code (UCC) for transactions involving negotiable instruments.

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Contracts

accord and satisfaction

Individual & Family Legal Plan

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Pennsylvania State Code

Contracts

accord and satisfaction

Pennsylvania State Code

Articles