Accord and satisfaction is a legal device utilized to satisfy a monetary obligation when there is genuine confusion as to how much is owed. It can streamline litigation by eliminating the need for a trial on a contract action based on the parties’ conduct.
An accord and satisfaction’s key elements are:
(1) a good faith dispute between the parties as to the amount owed;
(2) a not readily calculable (“unliquidated”) amount owed;
(4) a shared mutual intent to compromise the claim; and
(5) execution or performance of the agreement.
The “accord” is the agreement; the “satisfaction” is the agreement’s execution or performance.
Where a party tenders a check marked “payment in full”, the check recipient’s act of cashing the check can count as an acceptance (or satisfaction) of the accord.
Accord and satisfaction only applies where there is an actual dispute between the parties and the monetary amount in question isn’t easily calculable.
Source: Boyer v. Built Properties, 2014 IL App (1st) 132780.