Duhaime's Law Dictionary


Accord and Satisfaction Definition:

The act of one party, having complied with its contractual obligation, accepting some type of compensation from the other party (usually money and of a lesser value) in lieu of enforcing the contract and holding the other party to their original obligation.

Related Terms: Contract Law

In Ryder, Justice Squatrito wrote:

"Accord and satisfaction is a method of discharging a claim whereby the parties agree to give and accept something other than that which is due in settlement of the claim and to perform the agreement."

Or, this from Wolfe v Eagle Ridge Holding, which explains both terms:

"The term accord denotes an express contract between two parties by means of which the parties agree to settle some dispute on terms other than those originally contemplated, and the term satisfaction denotes performance of the contract."

Accord and satisfaction retires the contract.

Another definition cited by lawyers is that found in British Russian Gazette & Trade Outlook:

"Accord and satisfaction is the purchase of a release from an obligation arising under contract or tort by means of any valuable consideration, not being the actual performance of the obligation itself. The accord is the agreement by which the obligation is discharged. The satisfaction is the consideration which makes the agreement operative."

French: dation en paiement.

REFERENCES:

  • British Russian Gazette & Trade Outlook Ltd. v. Associated Newspapers Ltd. [1933] 2 K.B. 616
  • Ryder v. Washington Mutual Bank, 501 F. Supp. 2d 311 (United States District Court, Connecticut, 2007)
  • Wolfe v. Eagle Ridge Holding Company, 869 NE 2d 521 (Court of Appeals of Indiana, 2007)

Categories & Topics:


Always looking up definitions? Save time with our search provider (modern browsers only)

If you find an error or omission in Duhaime's Law Dictionary, or if you have suggestion for a legal term, we'd love to hear from you!