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New Jersey – Accord and Satisfaction

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)

Inside New Jersey – Accord and Satisfaction