Accord and Satisfaction CASES
In English law, accord and satisfaction is a legal principle allowing parties to discharge contractual or legal obligations by agreeing (accord) to accept alternative performance, and then completing that performance (satisfaction).
Definition and Principles
“Accord” refers to the agreement itself to settle an obligation differently than originally intended, while “satisfaction” is the completion of the agreed alternative. Once satisfied, the original obligation is permanently extinguished.
Common Examples
- Settling a debt for less than the original amount owed.
- Agreeing to accept services or goods instead of money owed.
- Resolving disputes through alternative compensation.
Legal Implications
- Once satisfaction occurs, original contractual rights are extinguished.
- Provides flexibility and clarity in settling disputes or obligations.
Practical Importance
Understanding accord and satisfaction enables parties to effectively manage disputes, reach compromises, and ensure that alternative resolutions are legally binding and final.
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Dr Foakes owed a judgment debt to Mrs Beer. She agreed to accept payment in instalments and forgo interest. After he paid the principal, she successfully sued for the interest, as her promise was unsupported by fresh consideration from Foakes. Facts The respondent, Mrs Julia Beer, had obtained a judgment in the High Court against the appellant, Dr John Weston Foakes, for the sum of £2090 19s. By law, judgment debts accrue interest from the date of the judgment. Subsequently, the parties entered into a written agreement whereby Dr Foakes agreed to pay £500 immediately and the balance in half-yearly
A small building firm was owed £482. The debtor's wife, knowing the builders were in financial difficulty, offered £300 in 'full settlement'. The builders accepted under pressure. The court held that this did not extinguish the debt, as the agreement was obtained by intimidation. Facts D & C Builders Ltd, a small building company, performed work for Mr Rees amounting to £746 13s. 1d. Mr Rees paid £250 on account, leaving a balance of £482 13s. 1d. Despite several requests for payment, the balance remained unpaid. The builders were in a desperate financial situation. Mrs Rees, acting for her husband,
