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Qualified Acceptance or Protest by Creditor

When a partial payment of a disputed or unliquidated claim is tendered as payment in full, and if the creditor is aware of this condition, then the creditor’s acceptance of the tender results in accord and satisfaction.  Even if the creditor protests that s/he has not accepted the amount in full satisfaction, it will amount to accord and satisfaction[i].

Under the common law rule, the seller can refuse or accept the check subject to the condition stated by the buyer.  However, the seller cannot accept the check and refuse to be bound by the condition[ii].  This rule applies only to a disputed or unliquidated claim in good faith by the buyer[iii].

In Ex parte Meztista[iv], parties formed a partnership and agreed to divide the assets and liabilities equally.  After the partnership lost its sole contract, the partnership tendered a check to the partner in full satisfaction of her partnership interest, which she cashed with a restrictive endorsement.  The partner sought dissolution of the partnership and an accounting of the partnership profits.

The court observed that the partner’s act of depositing the check completed an accord and satisfaction.  The court added that there was consideration and meeting of minds regarding the subject matter.

[i] Air Van Lines v. Buster, 673 P.2d 774 (Alaska 1983)

[ii] U.C.C. § 3-311

[iii] Id.

[iv]Ex parte Meztista, 845 So. 2d 795 (Ala. 2001)

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