Also known as: accord and agreement · accord · accord and satisfaction
Written by attorneys · grounded in primary & secondary sources — see below
A contractual mechanism by which an obligor promises to render a different performance that the obligee agrees to accept in satisfaction of the original duty. The original obligation remains in force until the obligor completes the substituted performance.
Albert Allen owed Anchor Bank under an original loan but entered an accord agreement to transfer equipment instead. When the bank sued only Allen after he failed to deliver the equipment, the court examined whether complete relief among existing parties was possible without joining the equipment supplier as a required party.
Anthony Arnold agreed to pay Apollo Energy a reduced sum under an accord agreement for a disputed services contract. Apollo later discovered Arnold had misrepresented the equipment condition at formation. Apollo sought to avoid the accord and enforce the original obligation.
Aurora Biotech entered an accord agreement with a foreign supplier to settle a supply contract after an executive order restricted dealings. The company challenged the order on constitutional grounds. Courts applied rational basis review and upheld the order as rationally related to national security.
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Alexis Archer and Avalon Pharmaceuticals formed an accord agreement to settle a licensing dispute by substituting a different royalty rate. Both parties believed the original patent remained valid, but it had been invalidated earlier. Archer sought to rescind the accord on grounds of mutual mistake.
Austin Abbott reached an accord agreement with relatives to transfer inherited property interests in exchange for a cash payment. The city later challenged the transfer under a zoning ordinance limiting household occupancy. The court assessed whether the ordinance violated substantive due process protections for family living arrangements.
Audrey Ashton entered an accord agreement with State Farm to settle an insurance claim by accepting a lower payout. After State Farm delayed performance, Ashton sued for breach and sought punitive damages. The court evaluated whether the insurer's conduct justified an award beyond compensatory relief.
Under an accord agreement the original duty is not discharged until the obligor completes the substituted performance. A substituted contract immediately replaces and discharges the original obligations upon formation.
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Discharge occurs only upon satisfaction, which is the obligor's proper completion of the different performance promised in the accord. Until that performance is rendered the original duty remains enforceable.
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The obligee may enforce either the original obligation or the accord agreement itself. The choice depends on whether the obligee elects to treat the breach as reviving the initial duty or as a breach of the accord.
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…cases of the 1930's and 1940's such as West Coast Hotel Co. v. Parish, supra , the courts came to demand far less from and to accord far more deference to legislative judgments. This was particularly true with respect to legislation seeking to control or regulate the economic life of the State or Nation. Even so, "while…