Accord and Satisfaction

THE AFFIRMATIVE DEFENSE OF ACCORD AND SATISFACTION: What is accord and satisfaction as a legal concept? Under Texas common law, the affirmative defense of accord and satisfaction is based on an express or implied contract under which the parties agree to discharge an existing obligation by means of a lesser payment that is tendered and accepted. Lopez v. Munoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 863 (Tex. 2000). What does it take to successfuly assert this defense? To prevail on this defense, [ Defendant ] had to produce evidence establishing (1) a dispute between the parties, and (2) that the parties specifically and intentionally agreed to discharge [ the Defendant's ] prior obligations. See id. An alleged agreement is sufficiently definite if a court is able to determine the respective legal obligations of the parties thereunder. Playoff Corp. v. Blackwell, 300 S.W.3d 451, 455 (Tex. App.—Fort Worth 2009, pet. denied) (citing T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992)). Stated conversely, if an alleged agreement is so indefinite as to make it impossible to fix the legal obligations and liabilities of the parties, it cannot constitute an enforceable contract. Id. (citing Restatement (Second) of Contracts § 33(2) (1981)). The very nature of an accord and satisfaction is that the obligee under an agreement agrees to accept less than owed under the original agreement in return for extinguishing the obligations under that agreement. See Lopez, 22 S.W.3d at 863. SOURCE: Houston Court of Appeals - 14-10-00081-CV - 6/7/11 Related legal terms: settlement agreement, release, Rule 11 agreement to compromise claims

Accord and Satisfaction as Affirmative Defense to Debt Claim

WHAT IS "ACCORD AND SATISFACTION" AS A LEGAL CONCEPT? The affirmative defense of accord and satisfaction is a type of contractual modification that rests upon a new contract, express or implied, in which the parties agree to the discharge of the existing obligation by means of a lesser payment tendered and accepted. Jenkins v. Henry C. Beck Co., 449 S.W.2d 454, 455 (Tex. 1969). A modification of a contract must satisfy the elements of a contract: a meeting of the minds supported by consideration. Hathaway v. Gen. Mills, Inc., 711 S.W.2d 227, 228 (Tex. 1986). Whether a contract is modified depends on the parties' intentions and is a question of fact. Id. at 228-29. ACCORD AND SATISFACTION REQUIRES AGREEMENT ON MODIFICATION OF ORIGINAL CONTRACT AND CONSIDERATION The burden of proving modification rests on the party asserting the modification. Id. at 229. Because a valid accord and satisfaction depends upon an agreement, it "only occurs when the parties mutually assent to it," and their intention is a controlling element. McCarty v. Humphrey, 261 S.W. 1015, 1016 (Tex. Comm'n App. 1924, judgm't adopted). The trial court found that there was no mutual assent or “meeting of the minds” necessary for an accord and satisfaction. We defer to the trial court’s findings of fact that there was not sufficient intent that a new agreement was formed. We find that the trial court did not err in its finding of no accord and satisfaction as a matter of law and that this finding is not against the great weight of the evidence. SOURCE: 10-07-00362-CV (Tenth Court of Appeals-Waco) (10/28/2009)