The general rule is that the party alleging discharge of the debt by accord and satisfaction must prove the same by cogent evidence. Though clear and cogent evidence is required, even evidence that tends to prove the existence of circumstances and conditions which make it more or less likely that the parties agreed to an accord and satisfaction is admissible in an action to prove an accord and satisfaction.[i]
Generally, a receipt does not in and of itself constitute an accord and satisfaction although it is admissible as evidence to that effect.
In the case of Sherman v. Stewart Co.[ii], it was observed that where an action is brought upon an itemized account and the defendant claims an accord and satisfaction, testimony as to the amount owing by the defendant is competent as to the issue of accord and satisfaction; such evidence bears upon whether the plaintiff would have accepted and the defendant would have paid the amount claimed in settlement.
In case of accord and satisfaction, parol evidence is admissible to show the situation of the parties and the circumstances under which the instrument was made.[iii] In the case of Myers v. American Finance System of Decatur, Inc.[iv], 615 F.2d 368 (5th Cir. 1980 it was observed by the court that parole evidence is admissible to determine whether a creditor assents to a recital in a document of accord and satisfaction.
In the case of Union River Associates v. Budman,[v] it was observed by the court that the evidence of the parties’ settlement negotiations was relevant to establish the existence of an accord and satisfaction. The appellate court therefore held that in a forcible entry and detainer action the lower court went wrong in excluding the tenant’s offer of such evidence.
If the intent as to whether a new agreement abrogates a former contract cannot be determined expressly or impliedly from the contract provisions, the court may consider evidence of the surrounding circumstances to determine if an accord and satisfaction exists.[vi] Therefore, in order to determine the intent of the parties to an accord and satisfaction, a court engages in an external interpretation of the party’s or parties’ intent. This is manifested by, among other things, actions, words, prior practice between the parties, and practices in the trade or profession.[vii]
Evidence of want of consideration, fraud, duress, illegality[viii], or rescission of the accord contract may be introduced to defeat a claim of accord and satisfaction.[ix]
[i] Collins v. Gaskill, 359 Mo. 171, 221 S.W.2d 181 (1949)
[ii] 216 Miss. 549, 62 So. 2d 876 (1953)
[iii] Nauman v. McCoy, 84 Ga. App. 131, 65 S.E.2d 853 (1951)
[iv] 615 F.2d 368 (5th Cir. 1980)
[v] 2004 ME 48, 850 A.2d 334 (Me. 2004)
[vi] CitiSteel USA, Inc. v. Connell Ltd. Partnership, 758 A.2d 928 (Del. 2000)
[vii] Weaver v. American Power Conversion Corp., 863 A.2d 193 (R.I. 2004)
[viii] Scheanwald v. Economy Sav. & Loan Co., 117 Ohio App. 29, 23 Ohio Op. 2d 1, 189 N.E.2d 731 (6th Dist. Lucas County 1960).
[ix] Di Maria v. Mitchell, 112 Cal. App. 2d 691, 247 P.2d 60 (1st Dist. 1952)
