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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 New Jersey, accord and satisfaction is a recognized legal principle that allows parties to settle a dispute by agreeing to terms that are different from the original contract or obligation. This agreement must be made voluntarily by both parties and typically involves the creditor agreeing to accept a different performance (often less than what is originally owed) in full satisfaction of the original debt or claim. The debtor must offer the new terms as full satisfaction of the debt, and the creditor must accept this offer, either expressly or impliedly, for the accord and satisfaction to be binding. Once the new agreement is executed, the original obligation is discharged, and the creditor cannot later demand further payment of the original debt. This principle is codified under New Jersey law, specifically under NJSA 12A:1-103, which incorporates the Uniform Commercial Code's provisions regarding accord and satisfaction by use of an instrument.

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Creditor / Debtor

accord and satisfaction

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Creditor / Debtor

accord and satisfaction