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Different Medium of Payment, Generally

If a creditor accepts payment of liquidated demand not as per the contract agreed between the parties but in a different medium, there will be adequate new or additional consideration to support the transaction as an accord and satisfaction.  However, the liquidated demand accepted must be in full discharge of the demand.  Where a creditor accepts the payment made by debtor as payment in full, courts will hold that the debt is satisfied.  Even if the medium of payment benefits creditor more than the payment contemplated by the contract, the courts will not inquire into the adequacy of the consideration.

Under common law, the acceptance of a smaller sum for a debt due will not effect the satisfaction of the total debt even if agreed and expressed to be payment in full, since there is lack of consideration.  Under the doctrine of accord and satisfaction, the liquidated demand accepted less than as agreed but in full satisfaction, is not invalid for lack of consideration and bears all the elements of a contract.[i]

In Thielen v. Thielen,[ii] court held that the payment of a smaller sum in full discharge of an unliquidated or disputed claim is a good accord and satisfaction supported by sufficient consideration.

[i] In re Zerodec Mega Corp., 47 B.R. 304 (Bankr. E.D. Pa. 1985)

[ii] 88 Haw. 191 (Haw. Ct. App. 1998)

Inside Different Medium of Payment, Generally