(Orig. Code 1863, § 2822; Code 1868, § 2830; Code 1873, § 2881; Code 1882, § 2881; Civil Code 1895, § 3735; Civil Code 1910, § 4329; Code 1933, § 20-1204; Ga. L. 1979, p. 1051, § 1.)
Law reviews.- For article discussing the anachronistic nature of the Georgia Contracts Code as dramatized by comparing the doctrine of consideration as it is formulated in the Restatements of Contracts and in Code 1933, Title 20 (now this title), and the interpretative approach Georgia courts have taken in dealing with such Code, see 13 Ga. L. Rev. 499 (1979). For article surveying recent legislative and judicial developments in Georgia's real property laws, see 31 Mercer L. Rev. 187 (1979). (But see amendments by Ga. L. 1981, p. 876.) For article, "Construction Law," see 53 Mercer L. Rev. 173 (2001). For comment on Doniger and Co. v. Briggs, 61 Ga. App. 699, 7 S.E.2d 321 (1940), see 4 Ga. B.J. 50 (1942). For comment on Rivers v. Cole Corp., 209 Ga. 406, 73 S.E.2d 573 (1952), see 15 Ga. B.J. 339 (1953).
JUDICIAL DECISIONSANALYSIS
Section applies to case of claim by one person against another for usury paid by former to latter. Hanes v. First Fed. Sav. & Loan Ass'n, 101 Ga. App. 609, 114 S.E.2d 804 (1960).
Section inapplicable to composition agreement of creditors. Stewart Bros. v. Langston & Woodson, 103 Ga. 290, 30 S.E. 35 (1898).
Accord and satisfaction requires offer and acceptance on condition that it is in full settlement of outstanding debt. Vintage Enters., Inc. v. Guerdon Indus., Inc., 365 F. Supp. 465 (N.D. Ga. 1973).
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).
Deposit of a check constituted an accord and satisfaction under O.C.G.A. § 11-3-311 of a settlement agreement in a debt dispute as a dispute under O.C.G.A. § 13-4-103(b)(1) existed as to the fee portion of the settlement and the letter sent with the check contained a conspicuous statement under O.C.G.A. § 11-1-201(10) that the tender of the check was full payment and satisfaction of the settlement. Blitch v. Walker Pharm., 295 Ga. App. 347, 671 S.E.2d 842 (2008).
Until paid, check tendered must be accepted as full payment to work accord and satisfaction. Bass Dry Goods Co. v. Roberts Coal Co., 4 Ga. App. 520, 61 S.E. 1134 (1908).
Creditor's acceptance of payment with understanding that it fully satisfies debt works accord and satisfaction.
- Actual payment and acceptance of lesser sum than due is binding if done with understanding that claim will thereby be satisfied. King v. Liberty Nat'l Life Ins. Co., 59 Ga. App. 450, 1 S.E.2d 223 (1939).
If debtor remits to creditor a sum of money, less than amount actually due, upon condition, either express or implied, that it is in satisfaction of creditor's claim, and latter accepts and retains the money, accord and satisfaction results, and this is true whether demand be liquidated or unliquidated, disputed or undisputed. Young v. Proctor, 119 Ga. App. 165, 166 S.E.2d 428 (1969).
When creditor receives and retains sum of money from debtor less than amount actually due with understanding, either express or implied, that it is received in satisfaction of 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. Gulf States Constr., Inc. v. Superior Rigging & Erecting Co., 125 Ga. App. 187, 186 S.E.2d 588 (1971); McGlaun v. Southwest Ga. Prod. Credit Ass'n, 256 Ga. 648, 352 S.E.2d 558 (1987).
If debtor remits a sum of money to the debtor's creditor, though less than amount actually due, with understanding, either express or implied, that it is in satisfaction of creditor's claim, and latter accepts and retains it, accord and satisfaction of demand results therefrom, and balance, insofar as the law is concerned, may not thereafter be recovered by debtor in action instituted for that purpose; this is true under the law whether debtor's claim or demand be liquidated or unliquidated, disputed or undisputed. Vintage Enters., Inc. v. Guerdon Indus., Inc., 365 F. Supp. 465 (N.D. Ga. 1973).
Georgia law provides an accord and satisfaction when a debtor remits to a creditor a sum of money, less than the amount claimed due, and the creditor accepts and retains the money in spite of the existence of a bona fide dispute. Rhone v. State Auto Mut. Ins. Co., 858 F.2d 1507 (11th Cir. 1988).
When there is dispute as to the amount due, and one party tenders and other accepts check reciting that the check is in payment in full of demand, and check is subsequently paid, reception and retention of the check can be set up as accord and satisfaction. Edwards Bottling Works v. Jarnagin & Weight, 11 Ga. App. 162, 74 S.E. 1004 (1912).
Check did not meet criteria for establishing accord and satisfaction not met.
- Trial court did not err in granting a creditor summary judgment in the creditor's action to collect the amount the creditor loaned to a debtor because a check a third party sent to the creditor did not meet the criteria of O.C.G.A. § 13-4-103(b) for accord and satisfaction when the cover letter that accompanied the check, which stated that the check was payment in full of the debt, was not an agreement between the creditor and debtor but was, at most, an agreement between the creditor and the third party; the cover letter did not meet the statutory language requiring an agreement between "the creditor and debtor," and sending such a cover letter with a check marked "payment in full," which check was then cashed, was not an "independent" agreement and was not an agreement between the creditor and debtor. Formaro v. Suntrust Bank, 306 Ga. App. 398, 702 S.E.2d 443 (2010).
Part of payment-in-full language on check stricken.- Chiropractor's negotiation of a check bearing the language "Settlement in Full" constituted an accord and satisfaction, even though the chiropractor struck out part of the payment-in-full language and wrote in a restrictive endorsement of the chiropractor's own which said "accepted as partial payment only." Rhone v. State Auto Mut. Ins. Co., 664 F. Supp. 1431 (S.D. Ga. 1987), aff'd, 858 F.2d 1507 (11th Cir. 1988).
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).
Deposit by agent without knowledge of controversy or authority to adjust debt, not accord and satisfaction.
- Mere authority given agent to endorse check for deposit does not effect accord and satisfaction based upon receipt of check for amount less than that due when agent does not have knowledge of any controversy as to amount of indebtedness or authority to adjust any such controversy. Clark Equip. Credit Corp. v. Refrigerated Transp. Co., 148 Ga. App. 405, 251 S.E.2d 321 (1978).
Accepting checks labeled as representing balance for year did not create such understanding. Vintage Enters., Inc. v. Guerdon Indus., Inc., 365 F. Supp. 465 (N.D. Ga. 1973).
Delivery of loan collateral.
- Borrower's delivery to bank of vehicle serving as collateral for loan did not constitute accord and satisfaction, even assuming that delivery was on express condition that delivery extinguished debt. Brewer v. Trust Co. Bank, 205 Ga. App. 891, 424 S.E.2d 74 (1992).
Payment conditioned on fully discharging unliquidated claim works accord and satisfaction when accepted and retained.- When claims of contractor under road contracts were unliquidated, acceptance and retention of amounts tendered by state on condition that the amounts be accepted in discharge of all contractor's claims or demands under contracts had effect of accord and satisfaction of those claims or demands. Chandler v. State Hwy. Bd., 61 F.2d 601 (5th Cir. 1932).
Promise of future performance generally not satisfaction unless expressly accepted as such. For such promise to be available in bar, it must be pleaded, and its acceptance averred. Brunswick & W. Ry. v. Clem, 80 Ga. 534, 7 S.E. 84 (1888).
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).
Burden is on defendant to affirmatively establish existence of accord and satisfaction. Prater v. American Protection Ins. Co., 145 Ga. App. 853, 244 S.E.2d 925 (1978).
Debtor must show express or implied understanding that acceptance and retention of payment satisfies accord.
- In order to show accord and satisfaction, debtor must show understanding, either express or implied that acceptance and retention of payment by payee is in satisfaction of accord. Richardson v. Richardson, 237 Ga. 830, 229 S.E.2d 641 (1976).
Limited to mind of debtor.
- Although the parties agreed that a promissory note signed by the defendant would satisfy the defendant's obligation to pay past due rent under a lease agreement, nothing in the record showed, that, by executing the promissory note, defendants agreed to settle any claims the defendants might have had for the plaintiff's alleged breach of the lease agreement and, in fact, there was no evidence whatsoever that a dispute existed regarding the plaintiff's alleged breach prior to the filing of the defendants' counterclaim; to the extent that the defendant's affidavit revealed that the defendant was aware of possible claims against the plaintiff under the lease agreement, such dispute was clearly "limited to the mind of the debtor," and, thus, the promissory note did not operate as an accord and satisfaction of any and all claims defendants may have had under the lease. Gouldstone v. Life Investors Ins. Co., 236 Ga. App. 813, 514 S.E.2d 54 (1999).
Cited in Lowry v. Sloan, 51 Ga. 633 (1874); Rogers v. Ball, 54 Ga. 15 (1875); Patterson v. Ramspeck & Green, 81 Ga. 808, 10 S.E. 390 (1888); Davis & Co. v. Morgan, 117 Ga. 504, 43 S.E. 732, 97 Am. St. R. 171, 61 L.R.A. 148 (1903); Bowen v. E.A. Waxelbaum & Bro., 2 Ga. App. 521, 58 S.E. 784 (1907); T.B. Redmond & Co. v. Atlanta & B. Air-Line Ry., 129 Ga. 133, 58 S.E. 874 (1907); Pennsylvania Cas. Co. v. Thompson, 130 Ga. 766, 61 S.E. 829 (1908); Heller v. Samuel Silver, Inc., 30 Ga. App. 488, 118 S.E. 449 (1923); Phillips v. Lindsey, 31 Ga. App. 479, 120 S.E. 923 (1923); Wilder Bros. v. Montgomery, 51 Ga. App. 231, 179 S.E. 861 (1935); Kooker-Bassett Furn. Co. v. Georgia Hardwood Lumber Co., 53 Ga. App. 175, 184 S.E. 910 (1936); Mortgage Purchase & Sales Co. v. Williamson, 55 Ga. App. 92, 189 S.E. 293 (1936); Mason v. Foster, 62 Ga. App. 104, 8 S.E.2d 180 (1940); Dunn v. Meyer, 193 Ga. 91, 17 S.E.2d 275 (1941); Farmer v. Bankers Health & Life Ins. Co., 69 Ga. App. 105, 24 S.E.2d 831 (1943); McLendon v. Johnson, 69 Ga. App. 214, 25 S.E.2d 53 (1943); Collier v. Mayflower Apts., Inc., 196 Ga. 419, 26 S.E.2d 731 (1943); Crow v. Bowers, 204 Ga. 786, 51 S.E.2d 855 (1949); King v. Prince, 89 Ga. App. 588, 80 S.E.2d 222 (1954); Owens v. Service Fire Ins. Co., 90 Ga. App. 553, 83 S.E.2d 249 (1954); Hatfield v. Colonial Life & Accident Ins. Co., 102 Ga. App. 630, 116 S.E.2d 900 (1960); McCullough v. Mobiland, Inc., 139 Ga. App. 260, 228 S.E.2d 146 (1976); Dolanson Co. v. Citizens & S. Nat'l Bank, 242 Ga. 681, 251 S.E.2d 274 (1978); Siegel v. Codner, 153 Ga. App. 438, 265 S.E.2d 287 (1980); Hartline-Thomas, Inc. v. H.W. Ivey Constr. Co., 161 Ga. App. 91, 289 S.E.2d 296 (1982); Municipal & Indus. Pipe Serv., Ltd. v. Walter E. Heller & Co., 163 Ga. App. 677, 296 S.E.2d 68 (1982); Carpet Transp., Inc. v. TMS Ins. Agency, Inc., 165 Ga. App. 734, 302 S.E.2d 421 (1983); Sepulvado v. Daniels Lincoln-Mercury, Inc., 170 Ga. App. 109, 316 S.E.2d 554 (1984); Charles Rossignol, Inc. v. Prophecy Corp., 177 Ga. App. 245, 339 S.E.2d 288 (1985); Lewis v. Alfred L. Simpson & Co., 183 Ga. App. 166, 358 S.E.2d 262 (1987); Hall v. Time Ins. Co., 854 F.2d 440 (11th Cir. 1988); Atlas Casing Co. v. Joyner, 192 Ga. App. 738, 386 S.E.2d 397 (1989); Wood Bros. Constr. Co. v. Simons-Eastern Co., 193 Ga. App. 874, 389 S.E.2d 382 (1989); Habachy v. Georgia Health Group, 207 Ga. App. 288, 427 S.E.2d 808 (1993); King Indus. Realty, Inc. v. Rich, 224 Ga. App. 629, 481 S.E.2d 861 (1997); Quintanilla v. Rathur, 227 Ga. App. 788, 490 S.E.2d 471 (1997); Mitchell v. W.S. Badcock Corp., 230 Ga. App. 352, 496 S.E.2d 502 (1998); Regions Bank v. Wachovia (In re Goldberg), 248 Bankr. 209 (Bankr. S.D. Ga. 2000); Frantz v. Piccadilly Place Condo. Ass'n, 278 Ga. 103, 597 S.E.2d 354 (2004).
Agreements to Accept Less
Agreement to accept less than full admitted, liquidated indebtedness not satisfaction until fully executed. Taylor v. Central of Ga. Ry., 99 Ga. App. 224, 108 S.E.2d 103 (1959).
Agreement to accept less than full amount of liquidated debt in future, unenforceable unless executed.
- Agreement by creditor whose claim is liquidated, to take in futuro less than full amount of debt, is an executory agreement and is without consideration and unenforceable, unless, by definite execution at future date, either by payment of money or its equivalent or discharge by new consideration, the agreement becomes executed, in which event such execution thereafter may be pleaded as accord and satisfaction for original debt. Walbridge v. Jacobs Pharmacy Co., 60 Ga. App. 404, 3 S.E.2d 876 (1939).
Accord and satisfaction as to liquidated, undisputed debt.
- Even if there is no bona fide dispute, actual payment and acceptance of lesser sum than due will be binding if done with understanding that claim will thereby be satisfied. Matthews v. Gulf Life Ins. Co., 64 Ga. App. 112, 12 S.E.2d 202 (1940).
Where liquidated debt, upon which there is no dispute as to amount due, is agreed to be settled for less than its face value and settlement is consummated by payment of amount agreed upon and execution and delivery of writing stating that it is a release from all further claims, this is an accord and satisfaction and extinguishes all liability therefor by debtor. Hanes v. First Fed. Sav. & Loan Ass'n, 101 Ga. App. 609, 114 S.E.2d 804 (1960).
Execution of agreement to accept less than amount due estops creditor from claiming balance.
- Executed agreement to receive less than amount of debt due, by actual payment of money agreed upon, can be pleaded as accord and satisfaction, and will estop party so receiving money from asserting the part claim to balance. Tyler Cotton Press Co. v. Chevalier, 56 Ga. 494 (1876).
Debtor's subsequent correspondence sufficient for accord and satisfaction.- Debtor was entitled to the defense of accord and satisfaction when debtor's correspondence to the creditor amounted to a re-tender of the sum as full and final payment and the creditor subsequently deposited the check. Neal H. Howard & Assocs., P.C. v. Carey & Danis, LLC, 244 F. Supp. 2d 1344 (M.D. Ga. 2003).
Nothing short of actual performance or payment, meaning performance or payment accepted, will suffice. Capital Auto. Co. v. Rick, 134 Ga. App. 830, 216 S.E.2d 601 (1975).
When agreement to take less than sum claimed is executed.
- Agreement by creditor whose claim is liquidated to take in praesenti less than full amount of creditor's debt, where money is paid or its definitely agreed equivalent accepted, becomes executed agreement, and is an accord and satisfaction of original debt. Walbridge v. Jacobs Pharmacy Co., 60 Ga. App. 404, 3 S.E.2d 876 (1939).
When sum less than amount of claim is tendered by debtor in full settlement of claim and the sum is accepted by creditor, agreement is executed and results in valid and binding accord and satisfaction. David D. Doniger & Co. v. Briggs, 61 Ga. App. 699, 7 S.E.2d 321 (1940).
Retention of sum smaller than amount of undisputed debt, not accord and satisfaction absent agreement.
- In absence of independent agreement, retention by creditor of smaller sum offered in settlement of claim, as to amount of which there is no bona fide dispute, does not amount to accord and satisfaction. Sylvania Elec. Prods., Inc. v. Electrical Wholesalers, Inc., 198 Ga. 870, 33 S.E.2d 5 (1945); Treadwell v. Treadwell, 218 Ga. App. 823, 463 S.E.2d 497 (1995).
Acceptance in discharge, pursuant to agreement, of less than amount claimed, works accord and satisfaction.
- If creditor agrees to accept amount less than the creditor's claim in property, and does accept the property in discharge of such claim, defendant may plead it by way of accord and satisfaction. Burgamy v. Holton, 165 Ga. 384, 141 S.E. 42 (1927).
Acceptance of a sum as full settlement giving receipt and closing transaction executes contract.
- After $50.00 was paid and accepted as full settlement of claim, receipt was given, and transaction was closed, it was an executed contract, and was binding on parties. Whatley v. Troutman, 60 Ga. App. 23, 2 S.E.2d 731 (1939).
Mere payment of part of lesser sum agreed upon not accord and satisfaction. Troutman v. Lucas, 63 Ga. 466 (1879); Blalock v. Jackson, 94 Ga. 469, 20 S.E. 346 (1894).
Part payment of lesser amount not satisfaction of entire debt, but only defense pro tanto.
- Taylor v. Central of Ga. Ry., 99 Ga. App. 224, 108 S.E.2d 103 (1959).
Part execution of accord may be pleaded as satisfaction pro tanto. Brunswick & W. Ry. v. Clem, 80 Ga. 534, 7 S.E. 84 (1888).
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).
In a landlord-tenant dispute where a tenant who could vacate the premises on 120 days' notice gave notice of the tenant's intent to vacate and said the tenant would vacate on a later date and then subsequently said the tenant was only liable for rent for 120 days from the date of the tenant's notice rather than the date included with the notice, when the tenant actually vacated the premises within the 120 days, the tenant was liable for rent until the tenant's original vacation date (the date included in the notice), and the tenant's tender of rent until the date the tenant actually vacated was not an accord and satisfaction because the landlord did not agree to accept that amount in satisfaction of the rent due, nor was there evidence that the tenant's check for the lesser amount or the letter accompanying that check contained any conditional language, such as "payment in full." Logistics Int'l, Inc. v. RACO/Melaver, LLC, 257 Ga. App. 879, 572 S.E.2d 388 (2002).
Trial court did not err in finding that a commercial tenant failed to prove the affirmative defense of accord and satisfaction pursuant to O.C.G.A. § 13-4-103 in an action by the landlord for recovery of rent and other charges due as the tenant failed to show that there was a bona fide dispute as to the amount due prior to paying the reduced amount, and the restrictive wording on the check did not remedy the insufficiency of the proof. Rafizadeh v. KR Snellville, LLC, 280 Ga. App. 613, 634 S.E.2d 406 (2006).
Consideration for Accord and Satisfaction
Accord and satisfaction requires some benefit or new consideration to creditor.
- To be an accord and satisfaction, the state of facts relied on must contain some benefit or new consideration to creditor. Thurmond v. Peoples Auto. Loan & Fin. Cor., 118 Ga. App. 844, 165 S.E.2d 885 (1968).
Executory agreement to accept less than whole amount of debt not obligatory without fresh consideration to support the agreement. Taylor v. Central of Ga. Ry., 99 Ga. App. 224, 108 S.E.2d 103 (1959).
Executory agreement to accept less than amount claimed requires dispute or consideration to be enforceable.
- When agreement has not been fully executed, mere agreement to accept lesser sum than that claimed to be due would require that there exist a dispute or some other consideration. King v. Liberty Nat'l Life Ins. Co., 59 Ga. App. 450, 1 S.E.2d 223 (1939).
Agreement to accept less than total liquidated debt requires new consideration or complete performance.
- Executory agreement to accept payment of less than total amount of liquidated debt is not obligatory without new consideration or complete performance of agreement, and partial performance will not serve as consideration. Codner v. Siegel, 246 Ga. 368, 271 S.E.2d 465 (1980).
Even slight additional advantage or other new consideration to creditor may support accord and satisfaction.
- Even slight additional advantage, or other new consideration to creditor, such as waiver of defense by debtor, or debtor's agreement to surrender possession of realty covered by security deed before the debtor is legally obliged to do so, in exchange for promise by creditor that indebtedness shall thereby be discharged, where undertaking of debtor is fully performed and accepted, is a good accord and satisfaction. Mortgage Purchase & Sales Co. v. Williamson, 55 Ga. App. 92, 189 S.E. 293 (1936).
Settlement of disputed claim is sufficient consideration for accord and satisfaction. King v. Liberty Nat'l Life Ins. Co., 59 Ga. App. 450, 1 S.E.2d 223 (1939); Matthews v. Gulf Life Ins. Co., 64 Ga. App. 112, 12 S.E.2d 202 (1940).
When entire claim of party suing for damages is in dispute, and therefore doubtful, receipt of part, on condition that balance of claim be abandoned, is of advantage to plaintiff, and will be good as accord and satisfaction of whole claim. Tyler Cotton Press Co. v. Chevalier, 56 Ga. 494 (1876).
Bona fide dispute, even without merit, as to amount due, supports accord and satisfaction.
- When there is bona fide dispute, even without merit, over amount due, and amount less than amount of debt is accepted in settlement thereof, it amounts to accord and satisfaction of entire debt. Rivers v. Cole Corp., 86 Ga. App. 469, 71 S.E.2d 712, rev'd on other grounds, 209 Ga. 406, 73 S.E.2d 196 (1952).
Creditor's acceptance, pursuant to agreement, of less than amount claimed, is sufficient consideration.
- It would seem that agreement of creditor to receive less than amount of creditor's demand, and payment of money thereunder, is sufficient consideration for such agreement, and stands upon same footing as giving of additional security, or substitution of new debtor, or some other new consideration. King v. Liberty Nat'l Life Ins. Co., 59 Ga. App. 450, 1 S.E.2d 223 (1939).
Promise to relieve creditor from liability under first mortgage is adequate new consideration. Codner v. Siegel, 246 Ga. 368, 271 S.E.2d 465 (1980).
Promise to pay debt before it is due in smaller sum than owed suffices as necessary additional consideration. Codner v. Siegel, 246 Ga. 368, 271 S.E.2d 465 (1980).
Agreement to refrain from bankruptcy proceedings as consideration.
- Agreement by debtor not to go into bankruptcy and thereby be discharged from certain debt, or at least imperil the debt's collection, furnishes sufficient consideration. Dawson v. Beall, 68 Ga. 328 (1882).
Part payment of lesser sum agreed upon will not serve as consideration for agreement. Taylor v. Central of Ga. Ry., 99 Ga. App. 224, 108 S.E.2d 103 (1959).
Partial performance, absent other consideration, is not sufficient to support an accord and satisfaction by payment of a lesser sum than the amount owed on a liquidated debt. Codner v. Siegel, 246 Ga. 368, 271 S.E.2d 465 (1980).
Extent of accord and satisfaction based on payment.
- Jury issue existed as to the extent of the accord and satisfaction of a hospital's claims for treatment provided to a company's employees, and the company's liability for any remaining claims for the employees; as to one set of employees, there was conflicting evidence as to whether a $21,000 check was a settlement for hospital services provided in early 1997 only, or as to all amounts owed for their care from 1997 to 1999. Hosp. Auth. v. Pyrotechnic Specialties, Inc., 263 Ga. App. 886, 589 S.E.2d 644 (2003).
Insurance payout was binding accord and satisfaction.
- Summary judgment should have been granted for the insurer and the insurance adjusting company because the undisputed facts showed that the insurer and the insured entered into a binding accord and satisfaction, pursuant to O.C.G.A. § 13-4-103(b); there was no evidence of bad faith with regard to the insurer's settlement discussion with the insured and the attorney as it fully revealed the calculation of the final settlement amount in a letter, and it clearly indicated that no tag, title, or other fees were included. Progressive Cas. Ins. Co. v. Evans, 276 Ga. App. 594, 623 S.E.2d 767 (2005).
Effect of Retention of Payment
Mere retention of check is immaterial. Colfax Gin Co. v. Buckeye Cotton Oil Co., 24 Ga. App. 610, 101 S.E. 697 (1919).
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 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).
Existence of dispute between parties prior to tender of instrument.
- Acceptance of a check containing mere words of conditional payment will not constitute an accord and satisfaction unless a dispute as to the correctness of the amount of the debt existed previously to the tender. Sunbelt Life Ins. Co. v. Bank of Alapaha, 176 Ga. App. 628, 337 S.E.2d 410 (1985).
Absence of bona fide dispute between parties.
- In an action to remove a lien on property, the trial court did not err in granting summary judgment against the defendant on the basis of accord and satisfaction since it was uncontroverted that the plaintiff and defendant disagreed about the amount plaintiff owed for renovation work before plaintiff tendered a check marked "Payment in Full" to defendant. Kendrick v. Kalmanson, 244 Ga. App. 363, 534 S.E.2d 884 (2000).
Evidence supported a determination that the preexisting dispute between the parties was not a bona fide dispute and that the defendant acted in bad faith both in generating the underlying controversy and in its offer to settle that controversy through the tender of a check. Withington v. Valuation Group, Inc., 249 Ga. App. 8, 547 S.E.2d 594 (2001).
Acceptance of check with conditional language on it not accord and satisfaction.
- When there was no evidence of a preexisting bona fide controversy or of an independent agreement, plaintiff's acceptance of checks, even with notice of the conditional language on them, "Pd. in full . . . No Bal. on Paint," and "Pd. in full . . . No Bal. due," did not as a matter of law constitute an accord and satisfaction. Franklin v. Cummings, 181 Ga. App. 755, 353 S.E.2d 626 (1987).
Acceptance of check and endorsement with conditional language was accord and satisfaction
- Contractor's acceptance and deposit of a check tendered in partial payment of the contractor's bill for clearing rights of way in a housing development, along with a letter from the developer which stated the developer disputed the amount of work actually performed and that the tendered payment was in full constituted an accord and satisfaction under O.C.G.A. § 13-4-103(b) despite the fact that the contractor endorsed the check "with reservations"; thus, the contractor's action for additional payments allegedly owed was barred. Hawthorne Grading & Hauling v. Rampley, 252 Ga. App. 771, 556 S.E.2d 912 (2001).
When receipt and retention of check amounts to accord and satisfaction.
- Absent agreement, it is only when there is a dispute as to amount due, and one party tenders and other accepts check reciting that it is in payment in full of demand, and check is subsequently paid, that receipt and retention of check can be set up as 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).
Plaintiff's acceptance of a check from the defendants constituted an accord and satisfaction since the defendants mailed letters to the plaintiff detailing the dispute between the parties, indicating that the defendants were tendering an amount less than the total indebtedness set forth under the contract, and stating that an enclosed check, marked "final payment," constituted remuneration for "the balance of the contract," and the plaintiff accepted the payment without condition. Bridges v. Mann, 247 Ga. App. 730, 544 S.E.2d 755 (2001).
On facts, retention of stale check did not effect accord and satisfaction.
- Mere retention of stale check, since there was knowledge on part of debtor at time that creditor refused to accept the check 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).
RESEARCH REFERENCES
Am. Jur. 2d.
- 1 Am. Jur. 2d, Accord and Satisfaction, §§ 19, 20, 22, 24, 31, 35, 36, 37, 46, 53.
C.J.S.- 1 C.J.S., Accord and Satisfaction, §§ 33, 36.
ALR.
- Payment before maturity of part of a liquidated and undisputed indebtedness as a consideration for its acceptance in satisfaction of the entire debt, 24 A.L.R. 1474.
Acceptance of amount appropriated on account of claim against state or other public body as bar to balance of claim, 70 A.L.R. 1208.
Payment of undisputed amount or liability as consideration for discharge of disputed amount or liability, 112 A.L.R. 1219.
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.
Necessity and nature of consideration supporting landlord's reduction of rent, 30 A.L.R.3d 1259.