Legal Doctrine of Accord and Satisfaction
"The doctrine of accord and satisfaction discharges a contractual obligation or cause of action when the parties agree to exchange something of value in resolution of a claim or demand and then perform on that agreement, the accord being the agreement, and the satisfaction its execution or performance." Best Choice Fund, LLC v. Low & Childers, P.C., 228 Ariz. 502, 510,24, 269 P.3d 678, 686 (App. 2011)
See also Restatement (Second) of Contracts 281 (1981) (hereinafter "Restatement") ("An accord is a contract under which an obligee promises to accept a stated performance in satisfaction of the obligor's existing duty. Performance of the accord discharges the original duty."); 13 Corbin on Contracts 69.1 at 273 (2003) ("'Executory accord,' means an agreement for the future discharge of an existing claim by a substituted performance. An executory accord is a compromise.").
As our supreme court stated in Owens v. Hunter, an accord and satisfaction constitutes a substituted performance on an existing claim "which will bar an action on the original claim." 91 Ariz. 7, 10, 368 P.2d 753, 755 (1962)
"Acceptance of the substitute performance discharges the previously existing claim. a debtor's pleading and proving of the 'accord and satisfaction' is a complete defense to an action by the creditor on the previously existing claim." 13 Corbin on Contracts 70.1 at 301.
Generally, the elements essential for any valid contract must be present in a contract of accord and satisfaction.
Those elements are as follows:
(1) a proper subject matter;
(2) competent parties;
(3) an assent or meeting of the minds of the parties;
(4) a consideration." Baker v. Emmerson, 153 Ariz. 4, 7, 734 P.2d 101, 104 (App. 1986) (citing Vance v. Hammer, 105 Ariz. 317, 320, 464 P.2d 340, 343 (1970)); see 13 Corbin on Contracts 69.3 at 285 ("As in the formation of any other agreement, an offer of an accord creates the power of acceptance. . . . Once accepted, the offer becomes an accord.").