What is accord and satisfaction

I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Economics Microeconomics. What Is Accord and Satisfaction? Key Takeaways An accord and satisfaction is a new agreement that suspends the terms of an existing agreement in favor of a new one. As long as the parties in an accord and satisfaction meet the new terms, the previous agreement remains suspended. If a party fails to live up to the new terms of an accord and satisfaction then they may ultimately be liable for the more stringent terms of the original contract.

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What Is a Contract Novation? Novation is the act of replacing a contract with another contractual obligation, requiring the consent of all parties involved. Inside Indemnity Indemnity is compensation for damages or loss. When it is used in the legal sense, indemnity may also refer to an exemption from liability for damages. Contract Holder Definition A contract holder is a party who receives benefits outlined in the terms of a contract. Sign-in Help. Definition of accord and satisfaction. Contract Volume 22 Commentary.

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Miss Mrs. Legal Categories. The original contract still holds, but it is suspended with the understanding that the accord contract will fulfill its terms. When the accord agreement is satisfied, both that agreement and the original contract are considered fulfilled. Satisfaction refers to the fulfillment of an accord agreement by the promisor of the original contract.

If the obligation or service that was agreed upon in the accord is rendered, then the agreement is considered satisfied. This action also fulfills the consideration of the contract.

Accord and satisfaction is a term in contract law that refers to the acceptance of some new form of compensation in place of the original obligation that was created by a contract. Essentially, accord and satisfaction is a contract within a contract. Instead of throwing out the contract altogether, the two parties involved can decide to create an accord agreement and satisfy that agreement, which will, therefore, fulfill the overall contract.

Contract disputes are often settled with accord and satisfaction. If a contract is not fulfilled by one of the parties involved and the other takes legal action in order to force compensation for what was promised, they can agree on an accord to remedy the dispute without taking it to court.