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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, claim, or obligation. 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 settlement of the debt. The acceptance of the new terms, which is the 'accord,' and the performance of these terms, which is the 'satisfaction,' must both occur for the agreement to be binding. 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 enforceable, the agreement must be executed in good faith, with consideration, and with the intent to resolve the dispute. It is important to note that certain formalities may be required, such as a written agreement, especially when the dispute involves a significant sum of money or complex issues.

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Creditor / Debtor

accord and satisfaction

Individual & Family Legal Plan

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Delaware State Code

Delaware State Code

Creditor / Debtor

accord and satisfaction

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