Doctrine of Accord and Satisfaction

Definition

A process by which two parties to a claim involving a debt agree to discharge the claim by exchanging a new payment that will satisfy the claim, rather than enforcing the terms of the original contract. The act of substituting the new "contract” for the old contract discharges any remaining obligations under the old contract. The basic elements of a valid accord and satisfaction are that a person in good faith has tendered an instrument to the claimant as full satisfaction of the claim, the amount of the claim was unliquidated or subject to a bona fide dispute, and the claimant actually received and accepted the instrument.