In Delaware, the elements necessary for a common law accord and satisfaction are that:
- a bona fide dispute existed as to the amount owed that was based on mutual good faith,
- the debtor tendered an amount to the creditor with the intent that payment would be in total satisfaction of the debt, and
- the creditor agreed to accept the payment in full satisfaction of the debt.[i]
In Worthy Bros. Pipeline Corp. v. Acierno, the court opined that an accord is an agreement to accept something that is new or different from that which a party was originally entitled.[ii] An accord is a new contract that requires a meeting of the minds of the parties. The debtor must intend and make unmistakably clear that the payment tendered fully satisfies the creditor’s demand and the creditor must accept payment with the intention that it shall operate as a satisfaction. Thus, satisfaction is the execution of an accord.
[i] Milford Prof’l Plaza, L.L.C. v. Harris-Chin, 2008 Del. C.P. LEXIS 10 (Del. C.P. 2008)
[ii] Worthy Bros. Pipeline Corp. v. Acierno, 1995 Del. Super. LEXIS 483 (Del. Super. Ct. Oct. 11, 1995)