An agreement where one party promises to give or perform, and the other party promises to accept, something different from what was originally bargained for. The new promise is called the “accord,” and the performance of that promise is the “satisfaction.” Once the satisfaction occurs, it discharges the original obligation. As an example, consider a debt of $1,000. If the creditor agrees to accept $700 in full settlement, the agreement to accept $700 constitutes the accord. The payment of the $700 is the satisfaction. Once the $700 is paid and accepted, the original $1,000 debt is extinguished.
This legal concept provides a mechanism for resolving disputes and settling claims without resorting to litigation. It offers flexibility for parties to renegotiate terms and reach mutually agreeable resolutions when circumstances change or disagreements arise. Historically, it developed as a way to mitigate the strict application of contract law, allowing for equitable outcomes in situations where strict enforcement of the original contract would be unfair or impractical.
