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Showing posts from October 28, 2018

The BUSKLAW November Newsletter: I Can't Get No (Accord and) Satisfaction

Little did Mick Jagger know that if only he had added a few words to this rock classic he would have been singing about a classic doctrine in contract law: accord and satisfaction. This doctrine may elicit a "so what," but if you operate a business that invoices and receives payments from customers, you need to know about this doctrine - or face the real potential of economic loss. So bear with me. 

Accord and satisfaction is roughly equivalent to a compromise and settlement. In contract law, according to Professor Garner in his Dictionary of Legal Usage (3rd ed.), "an accord is an agreement to substitute for an existing debt or obligation some alternative form of discharging that debt; a satisfaction is the actual discharge of the debt by substituted means."

Accord and satisfaction issues commonly arise where a debtor tries to pay less than the amount invoiced for goods or services by a notation on the debtor's check that it's tendered in full payment. For e…