In this business law breakdown, Richards Rodriguez & Skeith founding partner Dan Richards discusses resolving disputes, and in particular the legal contract of accord and satisfaction.
What is Accord and Satisfaction?
Accord and satisfaction is a relatively powerful tool you can use to resolve money disputes. The elements are simple: There’s a claim for monies owed, the claim is disputed, and you then tender payment for what you believe is owed and the other side accepts the payment. If you keep the check or evidence of payment, that can serve as your release in the future.
How Does This Benefit Me?
The nice part about this is that you avoid the cost of costly negotiations over a release document, costly legal fees for having lawyers negotiate a release document, and you can just cut to the chase and get the matter resolved.
Certain Caveats
It is important to know that the dispute of the amount has to be in good faith. For example, you can’t just use this to send a check to your credit card company for half of what you owe them, and claim they’ve been paid in full. It also doesn’t resolve non-monetary disputes. So, if there are other issues between the parties, those do require negotiation of a release.
The good part about accord and satisfaction is that oftentimes it’s difficult for the claimant to turn down money in-hand versus continuing settlement negotiations that may often cost more than the amount owed. It’s a powerful tool to resolve relatively simple disputes.