Accord and Satisfaction

Civil Code Division 3, Part 1, Title 4, Chapter 4 deals with accord and satisfaction in extinguishing legal obligations in California.

Section 1521 provides that an accord is an agreement to accept, in extinction of an obligation, something different from or less than that to which the person agreeing to accept is entitled.

Section 1522 states that, though the parties to an accord are bound to execute it, yet it does not extinguish the obligation until it is fully executed.

Section 1523 provides that acceptance, by the creditor of the consideration of an accord extinguishes the obligation, and is called satisfaction.

Section 1524 states that part performance must be accepted by the creditor in writing, in satisfaction, or rendered in pursuance of an agreement in writing for that purpose, though without any new consideration, extinguishes the obligation.

Section 1525 provides a statement of public policy.

Section 1526 says that, where a claim is disputed or unliquidated and a check or draft is tendered by the debtor in settlement thereof in full discharge of the claim, and the words “payment in full” or other words of similar meaning are notated on the check or draft, the acceptance of the check or draft does not constitute an accord and satisfaction if the creditor protests against accepting the tender in full payment by striking out or otherwise deleting that notation or if the acceptance of the check or draft was inadvertent or without knowledge of the notation.

The acceptance of a check or draft by a creditor constitutes an accord and satisfaction when the check or draft is issued pursuant to or in conjunction with a release of a claim.