According to New Jersey courts, an accord and satisfaction may properly be defined as a method of discharging a contract, or setting aside a cause of action by substituting for such contract or cause of action, an agreement for the satisfaction thereof and the execution of such subsequent agreement.[i] The essential conditions of an accord and satisfaction are:
- proper subject matter;
- competent parties;
- an assent or meeting of the minds; and
- a consideration.
An accord and satisfaction involves a new contract, and not the contemplated performance of the original contract.[ii] The traditional elements of an accord and satisfaction are:
- a dispute as to the amount of money owed;
- a clear manifestation of intent by the debtor to the creditor that payment is in satisfaction of the disputed amount; and
- acceptance of satisfaction by the creditor.[iii]
[i] Decato Bros. v. Westinghouse Credit Corp., 129 N.H. 504 (N.H. 1987)
[ii] Chancellor, Inc. v. Hamilton Appliance Co., 175 N.J. Super. 345 (Cty. Ct. 1980)
[iii] A. G. King Tree Surgeons v. Deeb, 140 N.J. Super. 346 (Cty. Ct. 1976)
