Accord and satisfaction is a method of discharging a claim whereby the parties agree to give and accept something in settlement of the claim and perform the agreement.  Accord is the agreement and satisfaction is its execution or performance.

In some jurisdictions, when a part of a single claim is conceded and only the balance is disputed, then the payment of the conceded portion of the claim can furnish sufficient consideration for an accord and satisfaction of the entire claim[i].

However, other jurisdictions follow the view that there can be no accord and satisfaction of a claim for payment of the amount which is admitted to be due will not furnish consideration for an accord and satisfaction of the entire claim[ii].

Generally, payment of an undisputed claim will not constitute sufficient consideration for an accord and satisfaction of another independent liquidated and undisputed claim[iii].  In other words, an accord and satisfaction can settle one or more claims, or a portion of a claim, without prejudicing the remaining claims[iv].

In Cuddy v. A&E Mech[v], a subcontractor claimed against two general contractors.  The general contractor made two payments together which was less than the amount billed by the subcontractor.  The second check included a statement which made clear that it was the final payment for all work completed till date.  Court observed that the general contractor met with the burden to show the occurrence of accord and satisfaction.

[i] Flagel v. Southwest Clinical Physiatrists, P.C., 157 Ariz. 196 (Ariz. Ct. App. 1988)

[ii] Cuddy v. A&E Mech., 53 Mass. App. Ct. 901 (Mass. App. Ct. 2001)

[iii] Occidental Life Ins. Co. v. Eiler, 125 F.2d 229 (8th Cir. Mo. 1942)

[iv] Hosp. Auth. v. Pyrotechnic Specialties, Inc., 263 Ga. App. 886 (Ga. Ct. App. 2003)

[v] 53 Mass. App. Ct. 901 (Mass. App. Ct. 2001)