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Accord and SatisfactionAccord and satisfaction refers to settling a debt without paying the full amount owed. It is a concept in contract law and works like this: The son of a friend agrees to install a fence on your property. The original amount agreed upon is $3,000, paid in two installments: $1,500 to start and $1,500 upon completion of the fence. Once the fence is finished you find it to be shoddily built and refuse to pay the second $1,500. You and your friend's son come to a new agreement, one in which you both agree that you will pay him $500 instead of $1,500. Thereby, a new contract is formed by the offer (you offer pay $500 instead of $1,500), the acceptance (the friend's son accepts the $500) and the consideration. The consideration is that for a $,1000 savings, the you give up that which you are entitled, a well built fence, and the friend's son gives up his right to the full price to avoid a lawsuit over inferior performance. Accord refers to the settlement agreed upon by the parties, and the “satisfaction” is the performance of the settlement. |