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Hawaii – Accord and Satisfaction

Hawaii courts have held that an accord is a contract under which an obligee promises to accept a stated performance in satisfaction of the obligor’s existing duty.[i]  Performance of the accord discharges the original duty.  Until performance of the accord, the original duty is suspended unless there is such a breach of the accord by the obligor as discharges the new duty of the obligee to accept the performance in satisfaction.  Breach of the accord by the obligee does not discharge the original duty.  However, the obligor may maintain a suit for specific performance of the accord, in addition to any claim for damages for partial breach.  An effective accord and satisfaction requires:

  • existence of a “bona fide dispute” between the parties involved,
  • tender by the obligor which gives the obligee adequate notice that a compromise is being proposed, and
  • effective acceptance of the compromise offer in order to discharge the original obligation.[ii]

 

[i] Azer v. Myers, 8 Haw. App. 86 (Haw. Ct. App. 1990)

[ii] Rosa v. Johnston, 3 Haw. App. 420 (Haw. Ct. App. 1982)


Inside Hawaii – Accord and Satisfaction