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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 Massachusetts, accord and satisfaction is a legal concept that allows parties to settle a dispute by agreeing to terms that are different from the original contract or obligation. This agreement must be voluntary and made by competent parties. For an accord and satisfaction to be enforceable, there must be a bona fide dispute regarding the original obligation, an offer of payment (the accord) that is accepted by the creditor, and the actual payment (the satisfaction). Once the satisfaction is made, the original obligation is discharged. The Uniform Commercial Code (UCC), which Massachusetts has adopted, also addresses accord and satisfaction in the context of negotiable instruments under Section 3-311. This section allows a debtor to discharge a debt by offering a payment amount in full satisfaction of the debt, which, if accepted by the creditor, resolves the dispute. It is important to note that specific rules apply, such as the requirement for a conspicuous statement that the payment is meant to be in full satisfaction of the debt. If the creditor cashes a check with such a statement, they may be barred from seeking additional payment.

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Creditor / Debtor

accord and satisfaction

Individual & Family Legal Plan

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Massachusetts State Code

Massachusetts State Code

Creditor / Debtor

accord and satisfaction

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