Accord and satisfaction

In English contract law, accord and satisfaction describes a type of contract in which the debtor acquires an objection to the old contract through a new contract. The debtor "buys" himself free from his obligation, but this does not happen in fulfillment of the original obligation. Instead, it creates a new contract with the Requirements Application (offer), acceptance (acceptance) and consideration , the debtor to the creditor of the original contract as a defense be urged against (objection). The classic definition of accord and satisfaction comes from Scrutton LJ in British Russion Gazette, Ltd. v Associated Newspapers, Ltd. [1933]:

“Accord and satisfaction is the purchase of a release from an obligation, whether arisiing under contract or tort, by means of any valuable consideration, not being the actual performance of the obligation itself. The accord is the agreement by which the obligation is discharged. The satisfaction is the consideration which makes the agreement operative. "

The general requirements for consideration apply to satisfaction . In particular, there is no consideration if the original debt is merely reduced. In this case an additional disadvantage for the debtor or an advantage for the creditor must accrue from the debtor to the creditor (see Pinnel's Case (1608), Foakes v Beer (1884)). If there is no valid consideration or if other validity requirements of a contract are not met, the obligee can sue without hindrance from the original contract.

Example: A commissions B to build a house for £ 1,000,000 and pays £ 100,000. Further installments are to be paid in accordance with the progress of construction. Upon completion, A refuses to pay the final installment of £ 100,000 due to construction defects. A and B agree on (accord), that B should receive only £ 50,000. In return, A wants to waive his warranty rights (satisfaction).