Accord and satisfaction describes what?

Accord and satisfaction describes what?

• A. Release of all obligations
• B. Novation
• C. Assignment of rights
• D. Agreement to accept performance in future satisfaction of an existing duty

Answer: (D)

Accord and satisfaction occurs when the parties agree that the debtor will perform something different from the original obligation, and the creditor accepts that substitute performance as full satisfaction of the existing duty. The important point is that the substitute performance is agreed upon as settling the claim, and satisfaction happens when that new performance is rendered (or accepted) in place of the original obligation. This is not just a release of obligations, nor a novation (which swaps out the contract or the debtor) or an assignment (which transfers rights). It’s specifically the agreement to accept a future performance as full settlement of the current duty.

Accord and satisfaction occurs when the parties agree that the debtor will perform something different from the original obligation, and the creditor accepts that substitute performance as full satisfaction of the existing duty. The important point is that the substitute performance is agreed upon as settling the claim, and satisfaction happens when that new performance is rendered (or accepted) in place of the original obligation. This is not just a release of obligations, nor a novation (which swaps out the contract or the debtor) or an assignment (which transfers rights). It’s specifically the agreement to accept a future performance as full settlement of the current duty.