Accord and satisfaction occurs where the parties to an agreement, by a subsequent agreement, have satisfied the former agreement, and the latter agreement has been executed. The execution of a new agreement may itself amount to a satisfaction of the former agreement, where it is so expressly agreed by the parties; and, without such agreement, if the new promise is founded on a new consideration, the taking of it is a satisfaction of the former agreement.
(Orig. Code 1863, § 2819; Code 1868, § 2827; Code 1873, § 2878; Code 1882, § 2878; Civil Code 1895, § 3732; Civil Code 1910, § 4326; Code 1933, § 20-1201.)
Law reviews.- For comment on Chocran v. Bell, 102 Ga. App. 617, 117 S.E.2d 645 (1960), see 24 Ga. B.J. 422 (1962).
JUDICIAL DECISIONSANALYSIS
General Consideration
Accord and satisfaction defined.
- Accord and satisfaction is agreement between two parties to give and accept something in satisfaction of right of action which one has against the other, which when performed is a bar to all actions on this account. Woodstock Rd. Inv. Properties v. Lacy, 149 Ga. App. 593, 254 S.E.2d 910 (1979); M.W. Buttrill, Inc. v. Air Conditioning Contractors, 158 Ga. App. 122, 279 S.E.2d 296 (1981).
Contract of accord and satisfaction is a separate contract. Eldon Indus., Inc. v. Paradies & Co., 397 F. Supp. 535 (N.D. Ga. 1975).
Accord and satisfaction is itself a contract and requires meeting of minds to render it valid and binding. Woodstock Rd. Inv. Properties v. Lacy, 149 Ga. App. 593, 254 S.E.2d 910 (1979).
There must be a meeting of the minds if the novation or accord and satisfaction is to be valid and binding. M.W. Buttrill, Inc. v. Air Conditioning Contractors, 158 Ga. App. 122, 279 S.E.2d 296 (1981); Derosa v. Shiah, 205 Ga. App. 106, 421 S.E.2d 718 (1992), cert. denied, 205 Ga. App. 899, 421 S.E.2d 718 (1992).
Accord and satisfaction requires express agreement or new consideration or execution.
- Agreement in accord and satisfaction of note is not satisfaction of debt unless it is so expressly agreed between parties, or new promise is founded on new consideration, or unless agreement in accord and satisfaction has been executed. Kent v. First Nat'l Bank, 57 Ga. App. 751, 196 S.E. 103 (1938); North Ala. Enters., Inc. v. Cap'n Sam's Cruises, Inc., 181 Ga. App. 718, 353 S.E.2d 578 (1987).
Must have all elements of de novo contract.
- A novation or accord and satisfaction is in itself a contract and must have all the elements of a de novo contract. Slappey Bldrs., Inc. v. FDIC, 157 Ga. App. 343, 277 S.E.2d 328 (1981); M.W. Buttrill, Inc. v. Air Conditioning Contractors, 158 Ga. App. 122, 279 S.E.2d 296 (1981).
New consideration, although slight, will be sufficient to support new agreement.
- Execution of new agreement may itself amount to satisfaction if new promise is founded on new consideration. A new consideration, although slight, will be sufficient to support new agreement. Codner v. Siegel, 246 Ga. 368, 271 S.E.2d 465 (1980).
Accord and satisfaction may result from oral transaction. Wood v. Yancey Bros. Co., 135 Ga. App. 720, 218 S.E.2d 698 (1975).
Intent of parties governs.
- Whether a debt is extinguished or forgiven by certain acts is dependent upon the intention of the parties to be arrived at from an examination of all the circumstances. Willingham v. Willingham, 160 Ga. App. 175, 286 S.E.2d 754 (1981).
Magic words not necessary if other evidence of intent is present.
- It is not necessary under O.C.G.A. § 13-4-101 that a check or the accompanying correspondence contain magic words such as "payment in full," "in full consideration" or "in final payment" if there is some other documentary evidence to show what the check is intended to cover. Commercial Union Assurance Co. v. Southeastern Ventilating, Inc., 159 Ga. App. 443, 283 S.E.2d 660 (1981); Hadson Gas Sys. v. Atlanta Airlines Term. Corp., 200 Ga. App. 363, 408 S.E.2d 454, cert. denied, 200 Ga. App. 896, 408 S.E.2d 454 (1991).
Parties need not intend particular solution.- Although the parties must intend to reach an accord and satisfaction, the parties need not agree or intend to agree that a judicial resolution of the underlying dispute would result in a particular solution. Hall v. Time Ins. Co., 854 F.2d 440 (11th Cir. 1988).
Accord and satisfaction may be effective, although unwillingly assented to.
- Accord and satisfaction, though unwillingly assented to, if acted on by other party to that party's injury will terminate the dispute. Glaze v. Western & A.R.R., 67 Ga. 761 (1881).
Parties may reach accord and satisfaction as to some, but not all, distinct contract demands.
- Accord and satisfaction may be made between contracting parties pro tanto. If contract is of such nature as to give rise to separate and distinct demands, or to create a number of separate obligations and cross-obligations, and a number of distinct breaches as to these separate obligations occur, parties may make accord and satisfaction, or what in law amounts to accord and satisfaction, as to one or more of these demands, without affecting others. State Farm Fire & Cas. Co. v. Fordham, 148 Ga. App. 48, 250 S.E.2d 843 (1978).
Compromise or mutual accord and satisfaction is binding on both parties. Collier v. Casey, 59 Ga. App. 627, 1 S.E.2d 776 (1939).
Completed contract of accord and satisfaction may be rescinded by agreement, or waived by acts or conduct of party thereto, in which case debt is restored to its original status. Eldon Indus., Inc. v. Paradies & Co., 397 F. Supp. 535 (N.D. Ga. 1975).
Avoidance of accord and satisfaction on ground of fraud generally requires restitution. Interstate Life & Accident Co. v. Shedrick, 57 Ga. App. 382, 195 S.E. 456 (1938).
Former Civil Code 1895, § 3711 (see O.C.G.A. § 13-4-60) governed rescission of fraudulent accord and satisfaction. Pattison v. Albany Bldg. & Loan Ass'n, 63 Ga. 373 (1879).
Breach of contract accepted in satisfaction of claim will not restore original status. Byrd Printing Co. v. Whitaker Paper Co., 135 Ga. 865, 70 S.E. 798, 1912A Ann. Cas. 182 (1911).
Effect of executed accord and satisfaction not dependent upon complete and literal performance.- Compromise and mutual accord and satisfaction is immediately binding upon parties and terminates prior obligations and prior controversy between the parties insofar as subject matter therein compromised. Its effect is not dependent upon complete and literal performance; rather, after execution, parties are relegated to their remedies thereunder. J.A. Jones Constr. Co. v. Greenbriar Shopping Ctr., 332 F. Supp. 1336 (N.D. Ga. 1971), aff'd, 461 F.2d 1269 (5th Cir. 1972).
Accord and satisfaction is an affirmative defense and burden of proof is upon defendant. McClure Ten Cent Co. v. Stone, 30 Ga. App. 584, 118 S.E. 498 (1923).
Burden of proof is on party relying on accord and satisfaction.
- Pleas of accord and satisfaction are pleas in confession and avoidance. Burden of pleading and proving existence, terms, and effect of accord and satisfaction is on party relying upon the accord and satisfaction. City of Atlanta v. Gore, 47 Ga. App. 70, 169 S.E. 776 (1933).
When accord and satisfaction is raised as a defense, burden of proof lies with party relying on the doctrine. McCullough v. Mobiland, Inc., 139 Ga. App. 260, 228 S.E.2d 146 (1976).
The burden is on the proponent to prove accord and satisfaction. M. Walter & Co. v. North Highland Assembly of God, Inc., 188 Ga. App. 852, 374 S.E.2d 792 (1988).
Generally, whether there is accord and satisfaction is question for jury. Woodstock Rd. Inv. Properties v. Lacy, 149 Ga. App. 593, 254 S.E.2d 910 (1979); All-Georgia Dev., Inc. v. Kadis, 178 Ga. App. 37, 341 S.E.2d 885 (1986); North Ala. Enters., Inc. v. Cap'n Sam's Cruises, Inc., 181 Ga. App. 718, 353 S.E.2d 578 (1987).
Whether there is an accord and satisfaction is a jury question. Commercial Union Assurance Co. v. Southeastern Ventilating, Inc., 159 Ga. App. 443, 283 S.E.2d 660 (1981); Greenway v. Cheatwood, 160 Ga. App. 143, 286 S.E.2d 471 (1981).
Cited in Beazley v. Gignilliat, 61 Ga. 187 (1878); Thompson v. Mallory Bros. & Co., 104 Ga. 684, 30 S.E. 887 (1898); Dillard v. Dillard, 118 Ga. 97, 44 S.E. 885 (1903); Phinizy v. Bush, 129 Ga. 479, 59 S.E. 259 (1907); Thompson v. Carrollton Bank, 29 Ga. App. 520, 116 S.E. 39 (1923); Joseph Liebling, Inc. v. C.L. Tabb & Co., 30 Ga. App. 38, 116 S.E. 666 (1923); Heller v. Samuel Silver, Inc., 30 Ga. App. 488, 118 S.E. 449 (1923); Georgia Nat'l Bank v. Fry, 32 Ga. App. 695, 124 S.E. 542 (1924); Spence v. Carter, 33 Ga. App. 279, 125 S.E. 883 (1924); Messenger Publishing Co. v. Overstreet, 36 Ga. App. 458, 137 S.E. 125 (1927); Whitehead v. Dillard, 178 Ga. 714, 174 S.E. 244 (1934); Stewart v. Finance Co., 49 Ga. App. 462, 176 S.E. 73 (1934); Wilder Bros. v. Montgomery, 51 Ga. App. 231, 179 S.E. 861 (1935); Keramidas v. Rusch, 58 Ga. App. 615, 199 S.E. 590 (1938); Whatley v. Troutman, 60 Ga. App. 23, 2 S.E.2d 731 (1939); David C. Doniger & Co. v. Briggs, 61 Ga. App. 699, 7 S.E.2d 321 (1940); J. Kuniansky, Inc. v. Ware, 192 Ga. 488, 15 S.E.2d 783 (1941); Millers Nat'l Ins. Co. v. Hatcher, 194 Ga. 449, 22 S.E.2d 99 (1942); City of Eastman v. Georgia Power Co., 69 Ga. App. 182, 25 S.E.2d 47 (1943); McLendon v. Johnson, 69 Ga. App. 214, 25 S.E.2d 53 (1943); Rural Elec. Appliance Co. v. Joiner, 69 Ga. App. 353, 25 S.E.2d 428 (1943); Gilpin v. Swainsboro Ice & Fuel Co., 74 Ga. App. 813, 41 S.E.2d 540 (1947); Manning v. Carroll, 204 Ga. 100, 48 S.E.2d 737 (1948); Cloud v. Bagwell, 83 Ga. App. 769, 64 S.E.2d 921 (1951); Owens v. Service Fire Ins. Co., 90 Ga. App. 553, 83 S.E.2d 249 (1954); Banister v. National Fire Ins. Co., 108 Ga. App. 202, 132 S.E.2d 518 (1963); Duncan v. Georgia Money Corp., 222 Ga. 643, 151 S.E.2d 769 (1966); Waters v. Lanier, 116 Ga. App. 471, 157 S.E.2d 796 (1967); Thurmond v. Peoples Auto. Loan & Fin. Corp., 118 Ga. App. 844, 165 S.E.2d 885 (1968); Coldway Carriers, Inc. v. Hartman, 120 Ga. App. 787, 172 S.E.2d 205 (1969); Young v. Forester, 122 Ga. App. 679, 178 S.E.2d 340 (1970); Gilchrist v. Skidmore, 227 Ga. 134, 179 S.E.2d 341 (1971); Epps Air Serv., Inc. v. Lampkin, 125 Ga. App. 779, 189 S.E.2d 127 (1972); National Personnel Serv. of Atlanta, Inc. v. Henson, 128 Ga. App. 189, 196 S.E.2d 179 (1973); Allstate Ins. Co. v. Moody, 128 Ga. App. 300, 196 S.E.2d 482 (1973); Cristal v. Harmon, 137 Ga. App. 153, 223 S.E.2d 210 (1976); Citizens & S. Nat'l Bank v. Morgan, 142 Ga. App. 337, 235 S.E.2d 767 (1977); Mutual Benefit Health & Accident Ass'n v. Reed, 144 Ga. App. 853, 242 S.E.2d 731 (1978); Dolanson Co. v. Citizens & S. Nat'l Bank, 242 Ga. 681, 251 S.E.2d 274 (1978); Landon v. Lavietes, 156 Ga. App. 123, 274 S.E.2d 120 (1980); Southeastern Waste Treatment, Inc. v. Chem-Nuclear Sys., 506 F. Supp. 944 (N.D. Ga. 1980); Rigdon v. Walker Sales & Serv., Inc., 161 Ga. App. 459, 288 S.E.2d 711 (1982); Leasing Sys. v. Easy St., Inc., 161 Ga. App. 756, 288 S.E.2d 879 (1982); Nationwide-Penncraft, Inc. v. Royal Globe Ins. Co., 162 Ga. App. 555, 291 S.E.2d 760 (1982); O'Kon & Co. v. Tishman Speyer Atlanta Assocs., 167 Ga. App. 741, 307 S.E.2d 282 (1983); Olympic Dev. Group, Inc. v. American Druggists' Ins. Co., 175 Ga. App. 425, 333 S.E.2d 622 (1985); Sunbelt Life Ins. Co. v. Bank of Alapaha, 176 Ga. App. 628, 337 S.E.2d 410 (1985); Charles Rossignol, Inc. v. Prophecy Corp., 177 Ga. App. 245, 339 S.E.2d 288 (1985); Bruce Tile Co. v. Copelan, 185 Ga. App. 469, 364 S.E.2d 603 (1988); Cheeks v. Novatel Carcom, Inc., 200 Ga. App. 664, 409 S.E.2d 229 (1991); Mitchell v. W.S. Badcock Corp., 230 Ga. App. 352, 496 S.E.2d 502 (1998); Kendrick v. Kalmanson, 244 Ga. App. 363, 534 S.E.2d 884 (2000).
Subject Matter of Accord and Satisfaction
All claims and demands, whether liquidated or unliquidated, disputed or undisputed, may furnish subject matter of agreement in accord and satisfaction, provided such agreement, like all other express or implied contracts, is supported by consideration. Matthews v. Sprayberry, 216 Ga. 40, 114 S.E.2d 516 (1960).
Acceptance of less than full amount owed in satisfaction of entire debt.
- An accord and satisfaction occurs if a creditor tenders to the debtor a sum of money, though it be less than the amount actually owed, and the tender is made upon the condition, express or implied, that it satisfies the entire debt, and if the creditor accepts the tender. Commercial Union Assurance Co. v. Southeastern Ventilating, Inc., 159 Ga. App. 443, 283 S.E.2d 660 (1981).
Satisfaction of debt by less than amount claimed, with nothing else, requires bona fide dispute.
- It is essential to sustaining of agreement in accord and satisfaction, whereby entire debt or disputed claim is to be satisfied by giving of less sum than that claimed and nothing more, that bona fide dispute or controversy exist between parties; this rule does not have application where damages are unliquidated, or where there is agreement in accord and satisfaction of liquidated claim by giving and acceptance of smaller sum and some additional consideration. Gledhill v. Brown, 44 Ga. App. 670, 162 S.E. 824 (1932).
Nature of disputed claim which will suffice as basis for accord and satisfaction.
- In accord and satisfaction of disputed claim it is not merit of contentions of either party which determines its validity to support such accord and satisfaction, its controlling factor being bona fides of debtor's contention, which as a general rule is a question of fact for jury. Nauman v. McCoy, 84 Ga. App. 131, 65 S.E.2d 853 (1951).
Where debt in dispute, payment and acceptance of agreed sum constitutes accord and satisfaction.
- Agreement by creditor to receive less than amount of the debt may be pleaded as accord and satisfaction where bona fide dispute arises between parties as to certain material terms of original contract and where such subsequent agreement is actually executed by payment of sum agreed upon. Nauman v. McCoy, 84 Ga. App. 131, 65 S.E.2d 853 (1951).
Dispute or controversy is not essential element of some forms of accord and satisfaction, as an accord and satisfaction of a liquidated claim by giving and acceptance of a smaller sum and some additional consideration. Burgamy v. Holton, 165 Ga. 384, 141 S.E. 42 (1927).
Agreement
Accord and satisfaction involves, among other things, express agreement or some new consideration. Wood v. Wood, 239 Ga. 120, 236 S.E.2d 68 (1977).
Unilateral mistake of creditor cannot serve as basis for accord and satisfaction.
- When plaintiff in suit to collect alleged indebtedness never agreed to write off any portion of loan balance to settle accounts, nor did defendant ask plaintiff to do so, and since intention of both parties was clearly that loans would be paid in full, and the only reason the loans were not was due to unilateral mistake of plaintiff, there was no accord and satisfaction. Sun Fed. Sav. & Loan Ass'n v. Manny, 156 Ga. App. 807, 275 S.E.2d 661 (1980).
When overpayment is made due to the unilateral mistake of one party, the doctrine of accord and satisfaction does not apply. Gulf Life Ins. Co. v. Folsom, 907 F.2d 1115 (11th Cir. 1990).
Party pleading accord and satisfaction must show express agreement or new consideration.
- Burden of proof of existence of accord and satisfaction lies with party relying on doctrine, which involves, among other things, express agreement or some new consideration. Fowler v. Gorrell, 148 Ga. App. 573, 251 S.E.2d 819 (1978).
Agreement will not operate as accord and satisfaction unless so agreed. Treisch v. Doster, 65 Ga. App. 41, 14 S.E.2d 612 (1941).
Execution of new agreement will itself amount to satisfaction only where expressly agreed by parties. First Nat'l Bank v. Appalachian Indus., Inc., 146 Ga. App. 630, 247 S.E.2d 422 (1978); Fowler v. Gorrell, 148 Ga. App. 573, 251 S.E.2d 819 (1978).
When there is no agreement to settle all disputes under contract, satisfaction does not result although money is demanded and received. Pierson v. Herrington, 138 Ga. App. 463, 226 S.E.2d 299 (1976); First Nat'l Bank v. Appalachian Indus., Inc., 146 Ga. App. 630, 247 S.E.2d 422 (1978); Fowler v. Gorrell, 148 Ga. App. 573, 251 S.E.2d 819 (1978).
Agreement to reach accord and satisfaction of disputed debt may be either express or implied. Eldon Indus., Inc. v. Paradies & Co., 397 F. Supp. 535 (N.D. Ga. 1975).
There must be meeting of minds as to subject matter embraced in accord and satisfaction. Myers v. American Fin. Sys., 615 F.2d 368 (5th Cir. 1980).
Meeting of minds required.
- To render accord and satisfaction binding, there must be meeting of minds as to subject matter embraced. Pierson v. Herrington, 138 Ga. App. 463, 226 S.E.2d 299 (1976).
To render agreement binding as accord and satisfaction, there must be meeting of minds as to subject matter embraced. First Nat'l Bank v. Appalachian Indus., Inc., 146 Ga. App. 630, 247 S.E.2d 422 (1978); Fowler v. Gorrell, 148 Ga. App. 573, 251 S.E.2d 819 (1978).
To render execution of new agreement binding, there must be meeting of minds as to subject matter embraced. Clark Equip. Credit Corp. v. Refrigerated Transp. Co., 148 Ga. App. 405, 251 S.E.2d 321 (1978).
An accord and satisfaction is a contract and thus requires a meeting of the minds of the two parties before it is valid and binding. Hinely v. Barrow, 169 Ga. App. 529, 313 S.E.2d 739 (1984).
Since accord and satisfaction is itself a contract, it requires a meeting of the minds as to the subject matter embraced in the accord and satisfaction. M. Walter & Co. v. North Highland Assembly of God, Inc., 188 Ga. App. 852, 374 S.E.2d 792 (1988).
Party need not intend to enter contract of accord and satisfaction to be bound. Eldon Indus., Inc. v. Paradies & Co., 397 F. Supp. 535 (N.D. Ga. 1975).
Subsequent agreement can only be implied from evidence of new consideration. McCullough v. Mobiland, Inc., 139 Ga. App. 260, 228 S.E.2d 146 (1976).
Accord and satisfaction requires intent of debtor to tender check in full settlement.- Contract of accord and satisfaction requires, in first instance, intent on part of debtor to tender check in full settlement of disputed claims. Eldon Indus., Inc. v. Paradies & Co., 397 F. Supp. 535 (N.D. Ga. 1975).
To constitute accord and satisfaction, payment must be made and accepted as satisfying entire debt.
- For tender by debtor of lesser amount than owed to constitute accord and satisfaction, it must be made and accepted upon condition, express or implied, that it satisfies entire debt. Georgia Marble Co. v. Judd, 118 Ga. App. 733, 165 S.E.2d 453 (1968).
If debtor tenders sum of money less than amount claimed upon condition, express or implied, that it satisfy entire debt, and creditor accepts tender, accord and satisfaction results. State Farm Fire & Cas. Co. v. Fordham, 148 Ga. App. 48, 250 S.E.2d 843 (1978); Chrietzberg v. Kristopher Woods, Ltd., 162 Ga. App. 517, 292 S.E.2d 100 (1982).
Parol evidence admissible to show scope of agreement forming basis of accord and satisfaction. Myers v. American Fin. Sys., 615 F.2d 368 (5th Cir. 1980).
Execution
Accord without satisfaction is no bar; it is only complete when all is done that was to be done in satisfaction. Campbell Coal Co. v. Pano, 51 Ga. App. 232, 180 S.E. 139 (1935).
Mere accord requires complete performance before the accord operates in satisfaction of original agreements. J.A. Jones Constr. Co. v. Greenbriar Shopping Ctr., 332 F. Supp. 1336 (N.D. Ga. 1971), aff'd, 461 F.2d 1269 (5th Cir. 1972).
Debt not discharged by executory agreement unless promise rather than performance was agreed upon satisfaction. Fouche & Fouche v. Morris, 112 Ga. 143, 37 S.E. 182 (1900); Hewlett v. Almand, 29 Ga. App. 392, 115 S.E. 501 (1923).
When agreement contains express understanding of new consideration, satisfaction need not be fully executed.
- When agreement itself shows either express understanding by parties thereto that it shall itself operate as discharge of prior contract, or when new promise of creditor is supported by new consideration amounting to benefit to creditor or detriment to debtor, satisfaction need not be fully executed. Powers v. American Nat'l Bank, 113 Ga. App. 302, 147 S.E.2d 791 (1966).
Acceptance of tender may be necessary even when agreement supported by new consideration.
- Even though new agreement be supported by sufficient new consideration, tender by debtor of amount agreed by creditor to be accepted in satisfaction of prior claim might be necessary in order for debtor to avail oneself of defense of accord and satisfaction. Powers v. American Nat'l Bank, 113 Ga. App. 302, 147 S.E.2d 791 (1966).
If accord is not supported by new consideration, satisfaction agreed to must be fully executed; and if any part thereof be executory, it is not sufficient as defense to action on prior claim. Powers v. American Nat'l Bank, 113 Ga. App. 302, 147 S.E.2d 791 (1966).
Agreement to accept less than full, admitted, liquidated indebtedness not a satisfaction until fully executed, and part payment of lesser amount is not satisfaction of entire debt but only a defense pro tanto. Taylor v. Central of Ga. Ry., 99 Ga. App. 224, 108 S.E.2d 103 (1959).
Defense based upon alleged accord can be sustained only when accord has been completely executed. Dixon v. Ernest L. Rhodes & Co., 44 Ga. App. 678, 162 S.E. 716 (1932).
Nothing short of actual performance accepted will sustain defense of accord and satisfaction.
- Defense based on alleged accord and satisfaction cannot be sustained by offer to perform or actual tender of performance; nothing short of actual performance - meaning thereby, performance accepted - will sustain such defense. Redman v. Woods, 42 Ga. App. 713, 157 S.E. 252 (1931), overruled in part by Worthen v. State, 2019 Ga. LEXIS 22 (Ga. 2019).
Willingness or readiness to pay or perform is not equivalent of performance or payment, and is therefore not satisfaction; nothing short of actual performance or payment, meaning performance or payment accepted, will suffice. Campbell Coal Co. v. Pano, 51 Ga. App. 232, 180 S.E. 139 (1935).
Defendant must show full performance and acceptance of alleged accord and satisfaction.
- When plea of accord and satisfaction is filed by defendant, defendant must show full performance of the terms by the defendant and full acceptance by plaintiff; unless the defendant shows this, accord is no bar to suit upon original contract or claim. Atlanta Life Ins. Co. v. Walker, 53 Ga. App. 80, 184 S.E. 776 (1936).
Accord sufficiently executed only when all is done which party agrees to accept as satisfaction of preexisting obligation. Atlanta Life Ins. Co. v. Walker, 53 Ga. App. 80, 184 S.E. 776 (1936).
Accord and satisfaction is only complete when all is done that was to be done in satisfaction. Rebel Mobile Homes v. Smith, 137 Ga. App. 496, 224 S.E.2d 483 (1976).
As long as accord is executory, although partially performed, original cause of action not extinguished, and action may be brought upon it, and remedy for defendant is to plead his part performance as satisfaction pro tanto. Atlanta Life Ins. Co. v. Walker, 53 Ga. App. 80, 184 S.E. 776 (1936).
One may in fact agree to take less than the full amount in satisfaction of a debt, but the accord, until full execution, is no bar to an action on the original debt. Peters v. Thomason, 157 Ga. App. 513, 277 S.E.2d 798 (1981).
Execution of part and tender of performance of residue of accord, insufficient to extinguish cause.
- To be good, an accord must be fully executed; execution of part and tender of performance of residue is not sufficient. As long as accord is executory, although it is partially performed, original cause of action is not extinguished. Taylor v. Central of Ga. Ry., 99 Ga. App. 224, 108 S.E.2d 103 (1959).
Executory agreement to rescind is not an accord and satisfaction absent agreement to that effect. Redman v. Woods, 42 Ga. App. 713, 157 S.E. 252 (1931), overruled in part by Worthen v. State, 2019 Ga. LEXIS 22 (Ga. 2019).
Application
Promise to accept stated amount in satisfaction of debt not binding until paid and accepted. Borden, Inc. v. Barker, 124 Ga. App. 291, 183 S.E.2d 597 (1971).
Agreement on final interest payment as accord and satisfaction.
- In an action on a note, summary judgment for the holder was error because an issue of fact remained regarding an accord and satisfaction, given affidavits that the holder agreed to forego collecting on the note in exchange for allowing the holder's mother to live in a home formerly owned by the holder's spouse and upon payment of a final interest payment of $1,500 in 1996, with no further requests for payment until 2010. Thomas v. Summers, 329 Ga. App. 250, 764 S.E.2d 578 (2014).
Balancing and liquidation of mutual accounts by agreement amounts to accord and satisfaction when executed. Loftis v. Allen Plumbing Co., 57 Ga. App. 847, 197 S.E. 45 (1938).
Executory agreement to accept less than full amount of debt not obligatory without fresh consideration to support the agreement, and mere payment of part of sum agreed on will not serve as consideration. Taylor v. Central of Ga. Ry., 99 Ga. App. 224, 108 S.E.2d 103 (1959).
Generally, execution of promissory note is prima facie evidence of full settlement of all accounts up to date of note. Collier v. Casey, 59 Ga. App. 627, 1 S.E.2d 776 (1939).
Relationship with Fair Labor Standards Act.- When employers entered into a contract with a former employee regarding unpaid salary, this agreement did not constitute an accord and satisfaction as to the employee's salary claim because there could not be private settlement of claims under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. Stout v. Smolar, F. Supp. 2d (N.D. Ga. Sept. 18, 2007).
Unless specifically agreed to, renewal of promissory note alone is not an accord and satisfaction. Douglas v. Dixie Fin. Corp., 139 Ga. App. 251, 228 S.E.2d 144 (1976). But see Collier v. Casey, 59 Ga. App. 627, 1 S.E.2d 776 (1939).
Renewal note for less than original note, presumed to settle differences between parties.
- New note for sum less than old note, given in renewal thereof, is presumptive evidence that all differences between parties were adjusted and settled when such new note was given. Collier v. Casey, 59 Ga. App. 627, 1 S.E.2d 776 (1939). But see Douglas v. Dixie Fin. Corp., 139 Ga. App. 251, 228 S.E.2d 144 (1976).
Evidence sufficient to support new consideration.
- When the money being paid by defendant-purchaser had to be paid in a different manner and on shorter terms than the original promissory notes, it was evidence sufficient to support a new consideration. North Ala. Enters., Inc. v. Cap'n Sam's Cruises, Inc., 181 Ga. App. 718, 353 S.E.2d 578 (1987).
Delivery and acceptance of check in full and complete settlement of claim.
- An accord and satisfaction occurs with the delivery and acceptance of a check as a stated amount in full and complete settlement of a claim, whether the amount of the claim is established or uncertain. Commercial Union Assurance Co. v. Southeastern Ventilating, Inc., 159 Ga. App. 443, 283 S.E.2d 660 (1981).
Acceptance of less than full amount of debt.
- When the plaintiff conducted a liquidation sale of property not pledged as collateral for the loan, and the plaintiff applied the proceeds of the sale to payment of the indebtedness, by doing this, the plaintiff gave the creditor additional security which the creditor had no right to demand, and this would constitute consideration for the creditor's alleged agreement to accept less than the full amount of the liquidated debt. South Atl. Prod. Credit Ass'n v. Gibbs, 257 Ga. 521, 361 S.E.2d 167 (1987).
If the debtor tenders a sum of money less than the amount claimed upon the condition, express or implied, that it satisfied the entire debt, and the creditor accepts the tender, an accord and satisfaction results. M. Walter & Co. v. North Highland Assembly of God, Inc., 188 Ga. App. 852, 374 S.E.2d 792 (1988).
Accord and satisfaction may result from acceptance of cash or check.
- It matters not whether tender be of cash or check; if check is accepted in full settlement, accord and satisfaction will result. Studstill v. AMOCO, 126 Ga. App. 722, 191 S.E.2d 538 (1972), aff'd, 230 Ga. 305, 196 S.E.2d 847 (1973), later appeal, 132 Ga. App. 56, 207 S.E.2d 553 (1974).
Binding accord and satisfaction barred all claims between parties.
- Because a valid general release entered into by home buyer and home builder effectuated a binding accord and satisfaction, barring any future claims between the parties, and absent evidence to void the release based on fraud, buyer's filed claims in subsequent suit filed against home builder were properly summarily dismissed; thus, assessment of attorney fees was not an abuse of discretion and a penalty for filing a frivolous appeal was ordered. Pacheco v. Charles Crews Custom Homes, Inc., 289 Ga. App. 773, 658 S.E.2d 396 (2008).
Retention of check for excessive period of time may work accord and satisfaction.
- If party intends to accept check as payment of demand, that check should be promptly presented for payment, usually within a 30-day period. When in absence of circumstances suggesting contrary state of facts, check, although not cashed, is kept for period greatly in excess of this time, such retention may of itself cause debtor to rely on theory that the debtor's offer (accord) has been accepted (satisfaction) in which case creditor no longer has right of action for any excess payment due. Studstill v. AMOCO, 126 Ga. App. 722, 191 S.E.2d 538 (1972), aff'd, 230 Ga. 305, 196 S.E.2d 847 (1973), later appeal, 132 Ga. App. 56, 207 S.E.2d 553 (1974).
Retaining check for unreasonable time without cashing or refusing acceptance as accord and satisfaction.
- Retention of check for unreasonable time without cashing and without indicating refusal to accept as accord and satisfaction will constitute acceptance. Studstill v. AMOCO, 126 Ga. App. 722, 191 S.E.2d 538 (1972), aff'd, 230 Ga. 305, 196 S.E.2d 847 (1973), later appeal, 132 Ga. App. 56, 207 S.E.2d 553 (1974).
When check contains language of accord and satisfaction, creditor's knowledge of its purpose conclusively presumed.- When tendered check is accompanied by statement or letter explaining certain claimed deductions, or when check contains express language of accord and satisfaction, creditor's knowledge of the check's purpose is in effect conclusively presumed. Eldon Indus., Inc. v. Paradies & Co., 397 F. Supp. 535 (N.D. Ga. 1975).
Acceptance and cashing of check accompanied by itemized listing of deductions constitutes accord and satisfaction as a matter of law, at least when evidence is not in dispute that creditor realized, or should have realized, that checks were tendered in full payment of obligation. Eldon Indus., Inc. v. Paradies & Co., 397 F. Supp. 535 (N.D. Ga. 1975).
Satisfaction accomplished by deposit with knowledge that tender was intended as fully settling disputed claim.
- When creditor receives and retains a sum of money from the debtor less than amount actually due the creditor with understanding, either express or implied, that it is received by the creditor in satisfaction of the creditor's claim or demand, the creditor cannot thereafter treat it as a nullity and recover balance, and this is so whether the creditor's claim or demand be disputed or undisputed, liquidated or unliquidated. Borden, Inc. v. Barker, 124 Ga. App. 291, 183 S.E.2d 597 (1971).
Act of depositing check, containing statement of certain claimed deductions coupled with knowledge that it was tendered in full settlement of disputed claim, completes contract of accord and satisfaction. Eldon Indus., Inc. v. Paradies & Co., 397 F. Supp. 535 (N.D. Ga. 1975).
When debtor indicated in a new correspondence that it intended the previously tendered check to be full and final payment of the amount the debtor owed to the creditor and the creditor subsequently deposited the check, the debtor was entitled to the defense of accord and satisfaction under O.C.G.A. § 13-4-101. Neal H. Howard & Assocs., P.C. v. Carey & Danis, LLC, 244 F. Supp. 2d 1344 (M.D. Ga. 2003).
Claim a bank filed against a corporate debtor's Chapter 7 bankruptcy estate was not barred by the doctrine of promissory estoppel under O.C.G.A. § 13-3-44 or the doctrine of judicial estoppel and was not satisfied under O.C.G.A. § 13-4-101 because the bank sued a company that insured property the debtor owned after the debtor's property was damaged in a fire, in an attempt to recover a debt it was owed by a business that was affiliated with the debtor, and settled that case; the bank held a valid claim for money the bank was owed that the bank did not recover from the insurance company and the settlement the bank reached with the insurance company did not affect the bank's right to seek payment of the bank's claim from the debtor's bankruptcy estate. In re PMF Enters. v. SouthCrest Bank (In re PMF Enters.), 517 Bankr. 350 (Bankr. M.D. Ga. 2014), aff'd, 531 Bankr. 881 (M.D. Ga. 2015).
Permitting repossession under security agreement, on condition that it extinguish debt, not accord and satisfaction.
- If defendant permits repossession only on condition that it extinguish the debt, this falls short of establishing an enforceable accord and satisfaction for it shows nothing more than attempted unilateral imposition without consideration of condition contrary to terms of original contract recognizing immediate right of repossession upon default. Barnes v. Reliable Tractor Co., 117 Ga. 777, 161 S.E.2d 918 (1968).
New contract for purchase and sale of same article, when fully executed, may be satisfaction of former agreement. Poland Paper Co. v. Foote & Davies Co., 118 Ga. 458, 45 S.E. 374 (1903).
Agreement on repair of defective construction work constituting compromise and mutual accord and satisfaction. See J.A. Jones Constr. Co. v. Greenbriar Shopping Ctr., 332 F. Supp. 1336 (N.D. Ga. 1971), aff'd, 461 F.2d 1269 (5th Cir. 1972).
On facts, retention of stale check did not effect accord and satisfaction.
- Mere retention of stale check, where there was knowledge on part of debtor at time that creditor refused to accept it in full satisfaction of unliquidated liability, and which was never cashed and was, at time of summary judgment order, in hands of maker, will not support judgment of accord and satisfaction. Studstill v. AMOCO, 126 Ga. App. 722, 191 S.E.2d 538 (1972), aff'd, 230 Ga. 305, 196 S.E.2d 847 (1973), later appeal, 132 Ga. App. 56, 207 S.E.2d 553 (1974).
Receipt of stock sooner than contemplated in the original agreement was consideration sufficient to support a new agreement and to constitute an accord and satisfaction with regard to the original agreement. Computer Maintenance Corp. v. Tilley, 172 Ga. App. 220, 322 S.E.2d 533 (1984).
No valid accor and satisfaction.
- It was error to find the existence of a partnership between a business owner and the alleged partner as the business was not included in any partnership agreement, described in any recorded statement, or acquired in a partnership name; furthermore, without any record evidence of a settlement agreement between the two, the court also erred in finding a valid accord and satisfaction. Yun v. Um, 277 Ga. App. 477, 627 S.E.2d 49 (2006).
Failure to give charge on part B of pattern jury instruction was error.
- In a breach of contract action pertaining to the sale of unshelled peanuts, the trial court committed reversible error in giving part A of the pattern charge on accord and satisfaction but failing to give part B of such charge, as the failure to give part B deprived the defendant of a defense fairly raised by the evidence. Golden Peanut Co. v. Bass, 249 Ga. App. 224, 547 S.E.2d 637 (2001), aff'd, 275 Ga. 145, 563 S.E.2d 116 (2002), cert. denied, 537 U.S. 886, 123 S. Ct. 32, 154 L. Ed. 2d 146 (2002).
RESEARCH REFERENCES
Am. Jur. 2d.
- 1 Am. Jur. 2d, Accord and Satisfaction, § 1, 2. 60 Am. Jur. 2d, Payment, § 2. 66 Am. Jur. 2d, Release, § 1.
C.J.S.- 1 C.J.S., Accord and Satisfaction, § 1. 17A C.J.S., Contracts, §§ 549, 578.
ALR.
- Failure to perform act required by new agreement as affecting character thereof as accord and satisfaction, 10 A.L.R. 222; 14 A.L.R. 230.
Trade acceptance or unsecured note or bill of debtor as accord and satisfaction, 62 A.L.R. 751.
Principal's acceptance of remittance from agent as an accord and satisfaction, 80 A.L.R. 1056.
Accepted offer to give or take less than full amount of liquidated claim as a novation or an accord executory, 96 A.L.R. 1133.
Payment of undisputed amount or liability as consideration for discharge of disputed amount or liability, 112 A.L.R. 1219.
Return or tender of consideration for release or compromise as condition of action for rescission or cancellation, action upon original claim, or action for damages sustained by the fraud inducing the release or compromise, 134 A.L.R. 6.
Validity and effect of agreement to pay original creditor part of debt refinanced under Federal Farm Loan Act, 147 A.L.R. 743.
Interest of spouse in estate by entireties as subject to satisfaction of his or her individual debt, 75 A.L.R.2d 1172.
Modern status of rule that acceptance of check purporting to be final settlement of disputed amount constitutes accord and satisfaction, 42 A.L.R.4th 12.
Creditor's certification of check purporting to be final settlement of disputed amount as constituting accord and satisfaction, 42 A.L.R.4th 95.
Creditor's retention without negotiation of check purporting to be final settlement of disputed amount as constituting accord and satisfaction, 42 A.L.R.4th 117.