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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 York, 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 mutual, with both parties consenting to the new terms, which typically involve the creditor accepting a lesser amount or different performance than what was originally owed. To be enforceable, the accord must be executed with the intention of resolving the dispute, and the satisfaction, which is the performance of the new agreement, must be completed. Once satisfaction occurs, the original obligation is discharged, and the parties are bound by the terms of the accord. This principle is often used in cases where there is a bona fide dispute over the debt or when the debtor is unable to fulfill the original terms due to financial hardship. It's important to note that the accord and satisfaction must be clear and unequivocal, and it is advisable for parties to document the agreement in writing to avoid further disputes. Under New York law, the Uniform Commercial Code (UCC) also addresses accord and satisfaction in the context of negotiable instruments, such as checks, under section 3-311.

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Creditor / Debtor

accord and satisfaction

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Creditor / Debtor

accord and satisfaction

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