An accord and satisfaction occurs when parties to a contract agree that the debt is discharged in a manner other than in accordance with the terms of their original contract.  The accord is the new agreement and satisfaction is the discharge of the obligation.  The debt is discharged only if debtor and creditor agree that amount paid by debtor to creditor fully satisfies the entire claim.  In order to repudiate a transaction in full satisfaction of claim creditor should return the tendered draft.[i] A tender back of payment is a necessary prerequisite for filing suit where a valid accord and satisfaction is established.  If a landlord wants to file suit to collect rent owed by the tenant the tender back of commercial tenant’s payment is a necessary prerequisite.  However if the amount paid in satisfaction is accepted to be due in any event, the creditor need not tender back the amount paid prior to bringing an action on the original obligation.[ii] Also if a creditor wants to avoid a contract of accord on the ground of want of consideration or fraud, the creditor need not tender back the amount paid prior to bringing an action on the original debt.

[i] Metromarketing Servs., Inc. v. HTT Headwear, Ltd., 15 S.W.3d 190 (Tex. App. Houston 14th Dist. 2000)

[ii] Faith Reformed Church v. Thompson, 248 Mich. App. 487 (Mich. Ct. App. 2001)