In short
An accord is an agreement to accept a different performance, often a smaller payment, in settlement of a disputed claim. Its performance (the satisfaction) discharges the original obligation.
Key takeaways
- Paying less on an undisputed, fixed debt isn't consideration for releasing the rest.
- If the accord isn't performed, the creditor can sue on the original claim or the accord.
- Cashing a check marked as payment in full of a disputed claim can create one.
Where it's tested
REG: Business Law: Contracts — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
On June 1, a merchant seller mails an offer to sell goods. On June 3, the seller mails a revocation. On June 4, the buyer mails an acceptance. On June 5, the buyer receives the revocation. Is there a contract?