Accord And Satisfaction Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Accord And Satisfaction, written in plain English, along with examples of how it is used.
What is Accord And Satisfaction?
n. a mutual consent to discharge the obligation and fulfillment of the legal consideration which binds the parties to the agreement. Lke for example, a satisfaction agreed upon between the party injuring and the party injured, between a debtor and payee.
History and Meaning of Accord And Satisfaction
Accord and Satisfaction is a legal term that refers to a contract law concept. It occurs when one party owes another party an existing obligation that has not yet been paid or fulfilled entirely, and both parties mutually agree to settle upon a new performance agreement as full satisfaction of the prior obligation. This new agreement is called the accord, and the performance or execution of the accord is called the satisfaction.
In essence, it is a negotiation between the two parties, with one party offering to settle the debt, and the other accepting that offer. Accord and satisfaction may occur in various contexts, such as employment contracts, debt collection, personal injury claims, and insurance settlements.
Examples of Accord And Satisfaction
Here are some examples of how Accord and Satisfaction might be used in different contexts:
A contractor completes work for a homeowner but overcharges for the services rendered. The homeowner disputes the price, and after a negotiation, it is agreed that the contractor would accept a lower sum, and the homeowner pays the agreed sum as full settlement of the debt. This is an example of Accord and Satisfaction.
An employee claims that they were wrongfully terminated, and after discussions with their former employer, they agree to settle for a certain amount of money. The employer pays the agreed sum to the employee, who, in turn, drops all legal claims against the employer. This is another example of Accord and Satisfaction.
Legal Terms Similar to Accord And Satisfaction
There are a few related legal terms that are similar to Accord and Satisfaction:
Novation: the substitution of a new contract for an existing one with the same result as Accord and Satisfaction.
Rescission: the cancellation of a contract by mutual agreement between the parties, returning the parties to their pre-contractual position.
Release: A legal document that terminates an existing claim or obligation.
Waiver: A voluntary and intentional relinquishment of a known right or privilege.