Accord And Satisfaction


DEFINITION of 'Accord And Satisfaction'

A legal contract whereby two parties agree to discharge a tort claim, contract or other liability for an amount or based on terms that differ from the original amount of the contract or claim. Accord and satisfaction is also used to settle legal claims prior to bringing them to court.

BREAKING DOWN 'Accord And Satisfaction'

The accord is the agreement on the terms, and the satisfaction is the performance of the agreement. When there is an accord and satisfaction, and the performance (or satisfaction) has been executed, all prior claims relating to the matter are extinguished.

An accord and satisfaction may occur in debt negotiations whereby the original credit agreement between the bank and Company A is revised (by stretching out payments, or reducing an interest rate) and Company A delivers on the new terms. If for some reason Company A does not deliver on the new terms, it may be liable for the original contract, because it did not satisfy the terms of the accord.

  1. Forbearance

    A temporary postponement of mortgage payments.
  2. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  3. Credit Agreement

    A legal contract in which a bank arranges to loan a customer ...
  4. Ex Works (EXW)

    An international trade term requiring the seller to make goods ...
  5. Turnkey Property

    A fully renovated home or apartment building that an investor ...
  6. D’Oench Duhme Doctrine

    A banking rule which states that a borrower or guarantor cannot ...
Related Articles
  1. Options & Futures

    Saving Your Home From Foreclosure

    Learn the tactics you can use to prevent your home from being repossessed.
  2. Credit & Loans

    Rate Freeze To Cool Mortgage Meltdown

    The U.S. government is offering help to subprime borrowers. Is this a cure or a curse?
  3. Term

    What are Mutually Exclusive Events?

    In statistics, mutually exclusive situations involve the occurrence of one event that does not influence or cause another event.
  4. Entrepreneurship

    Risks Associated With Government Contracts

    Government contracts can be rewarding, but they also come with a variety of risks.
  5. Entrepreneurship

    10 Public Companies That Rely On Govt. Contracts

    We look at 10 of the top public companies whose businesses rely on U.S. government contracts.
  6. Economics

    How Does an Operating Lease Work?

    Operating lease is a term used mostly in accounting to denote a lease that gives the lessee rights to use and operate an asset without ownership.
  7. Entrepreneurship

    Lockheed Martin Is Tight With The US Government

    The relationship between Lockheed Martin and the U.S. government is long-standing and the company's biggest revenue source, but it may be deteriorating.
  8. Home & Auto

    ‘Turnkey’ Properties: A Sensible Investment?

    Turnkey properties can make sense - for people who want a real estate investment without truly being in the real estate business.
  9. Economics

    Understanding Covenants

    A covenant is a term placed in a loan that requires the borrower to either maintain or refrain from certain business activities.
  10. Economics

    What is Earnest Money?

    An earnest money deposit shows the seller that a buyer is serious about purchasing a property.
  1. Are waivers of subrogation clauses ever ineffective in preventing a third-party lawsuit?

    Sometimes waiver of subrogation clauses are ineffective at preventing a third-party lawsuits. In determining who is responsible ... Read Full Answer >>
  2. What is an alienation clause?

    Whether used in reference to insurance policies, mortgages or commercial loans, an alienation clause stipulates that should ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  2. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  3. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  4. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  5. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
  6. Cost Of Funds

    The interest rate paid by financial institutions for the funds that they deploy in their business. The cost of funds is one ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!