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Michigan – Accord and Satisfaction

An accord and satisfaction refers to an agreement to substitute for an existing debt some alternative form of discharging that debt, coupled with the actual discharge of the debt by the substituted performance.  The new agreement is called the accord, and the discharge is called the satisfaction.[i]  An accord requires a meeting of the minds of the contracting parties.[ii]  A satisfaction is the discharge of the debt occurring after acceptance of the accord.[iii]

An accord and satisfaction is contractual in nature and constitutes an affirmative defense.  If in a good-faith dispute about an unliquidated amount owing under a contract, one party makes a tender in satisfaction of the claim and the other party accepts the accord, there is an accord and a satisfaction. [iv]

[i] Hoerstman Gen. Contr., Inc. v. Hahn, 474 Mich. 66 (Mich. 2006) 

[ii] Fritz v. Marantette, 404 Mich. 329 (Mich. 1978)

[iii] Hoerstman Gen. Contr., Inc., 474 Mich. 66, 70-71 

[iv] Nationwide Mut. Ins. Co. v. Quality Builders, Inc., 192 Mich. App. 643 (Mich. Ct. App. 1992)

Inside Michigan – Accord and Satisfaction