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New Mexico – Accord and Satisfaction

In New Mexico, an accord and satisfaction has been defined as a method of discharging a contract, or settling a cause of action arising either from a contract or a tort, by substituting for such contract or cause of action an agreement for the satisfaction thereof and the execution of such substituted agreement.[i]  When considering the existence of an accord and satisfaction, the court should examine elements such as whether:

  • The offer is in full satisfaction of the debt;
  • There is an unliquidated or disputed claim which formed the basis of the offer;
  • The offer is accompanied by acts and declarations which amounted to a condition;
  • There are acts and declarations such that the offeree was bound to understand them;
  • The offer is accepted in full satisfaction of the debt.[ii]


[i] Smith Constr. Co. v. Knights of Columbus, Council #1226, 86 N.M. 50 (N.M. 1974)

[ii] Los Atrevidos v. Preferred Risk Life Ins. Co., 107 N.M. 217 (N.M. 1988)

Inside New Mexico – Accord and Satisfaction