Contracts
Accord and Satisfaction
Definition
An accord is an agreement between the parties to a contract to accept different performance than what was originally promised, and satisfaction is the actual performance of the accord. Together, accord and satisfaction discharge the original obligation. The accord itself does not extinguish the prior duty until the new performance (satisfaction) is completed. This doctrine commonly arises in disputes over the amount owed on a debt.
Example
A debtor owes $10,000 but offers $7,000 in full settlement. If the creditor agrees and the debtor pays $7,000, the original $10,000 debt is discharged by accord and satisfaction.