accord and satisfaction

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Noun

accord and satisfaction - the settlement of a debt by paying less than the amount demanded in exchange for extinguishing the debt

settlement - a conclusive resolution of a matter and disposition of it

References in periodicals archive ?

A recent opinion from the Court of Appeals for the Seventh Circuit, discusses the legal principle of "accord and satisfaction"; how a debtor and creditor may rewrite a contract to settle an account dispute without court intervention.

Accord and satisfaction is generally defined as a "substitute contract between a debtor and creditor for the settlement of a debt for a different amount than allegedly owed." Accord and satisfaction has' evolved from common law principles that encourage parties to settle a disputed debt without judicial intervention.

A creditor cannot avoid an accord and satisfaction by either reserving his or her rights by writing on the check or by crossing out the full settlement language on the check.