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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 Texas, accord and satisfaction is a legal concept that allows parties to settle a dispute by agreeing to terms that are different from the original contract or obligation. This agreement is enforceable if it meets certain criteria. The new agreement, known as the 'accord,' must be executed with the intention of resolving the dispute, and the performance of the new agreement, referred to as the 'satisfaction,' discharges the original obligation. The Texas Business and Commerce Code, specifically Section 3.311, addresses accord and satisfaction by use of a negotiable instrument. This section outlines that a claim can be discharged if a person in good faith tenders an instrument to a claimant as full satisfaction of the claim, the amount of the claim is unliquidated or subject to a bona fide dispute, and the claimant obtains payment of the instrument. It is important for parties to clearly express their intent for accord and satisfaction to avoid any ambiguity that could affect the enforceability of the agreement.

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Creditor / Debtor

accord and satisfaction

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Creditor / Debtor

accord and satisfaction

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