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Louisiana – Accord and Satisfaction

Louisiana courts have adopted the common law doctrine of accord and satisfaction.  The conditions to apply this doctrine are:

  • an unliquidated or disputed claim;
  • a tender by the debtor; and,
  • an acceptance of the tender by the creditor.[i]

An additional prerequisite to settlement by accord and satisfaction is that the creditor must understand that if the reduced payment is accepted his/her claim will have been paid in full.  However, acceptance of the tender constitutes acceptance of the debtor’s offer, if the tender itself clearly sets forth that the lesser sum is offered in full payment of the disputed or unliquidated debt.

As in any other contract, acceptance of the offer must be by informed consent.[ii]  However, whether the creditor was fully informed of the nature of the compromise offered by the tender must be determined by the circumstances.

[i] Arender v. Gilbert, 343 So. 2d 1146 (La.App. 3 Cir. 1977)

[ii] Reily Electrical Supply, Inc. v. Hollenberg, 535 So. 2d 1321 (La.App. 5 Cir. 1988)

Inside Louisiana – Accord and Satisfaction