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Pennsylvania – Accord and Satisfaction

According to Pennsylvania courts, where there is a dispute or disagreement between the debtor and creditor as to their respective rights, a payment tendered in full satisfaction of the other’s claim operates as an accord and satisfaction if the payment is accepted and retained.[i]  An accord and satisfaction is the result of an agreement between the parties that may be and usually does result from an implied agreement arising from the circumstances.  If an agreement stems from a disputed claim, the acceptance of an amount less than the creditor claims to be due becomes a completed accord and satisfaction, when tendered by the debtor in full satisfaction of the creditor’s claim.

When a claim is disputed or unliquidated and the tender of a check or draft in settlement thereof is of such character as to give the creditor notice that it must be accepted in full satisfaction of the claim, or not at all, the retention and use thereof by the creditor constitutes an accord and satisfaction.[ii]  Thus, to establish accord and satisfaction, payment should be offered in full satisfaction of the demand and be accompanied by acts and declarations amounting to express notice that the payment is conditional and if accepted must be received in full satisfaction of the claim.

 

[i] Law v. Mackie, 373 Pa. 212 (Pa. 1953)

[ii] Barron Co. v. Fox & Co., 84 Pa. Super. 46 (Pa. Super. Ct. 1924)


Inside Pennsylvania – Accord and Satisfaction