How To Prove A Tennessee Accord and Satisfaction Defense
In Tennessee, a defense of Accord and Satisfaction is defined as:
An agreement to substitute for an existing debt some alternative form of discharging that debt, coupled with the actual discharge of the debt by the substituted performance. The new agreement is called the accord, and the discharge is called the satisfaction
It simply means:
When one person owes another money, but they decide to settle the debt with a different form or amount of payment.
There are 5 elements of the defense:
- Element 1. There was a contract or claim. In an Accord and Satisfaction Defense, there must be an existing agreement or dispute between parties, where one party owes something to the other, setting the stage for a resolution to settle that obligation.
Facts that might support this element look like:
* The parties entered into a written agreement outlining the terms of their transaction, which both signed and dated.
* The plaintiff acknowledged receipt of a partial payment that was intended to settle the disputed amount.
* The defendant provided a check marked “payment in full” for the outstanding balance, which the plaintiff cashed.
* Both parties engaged in negotiations that resulted in a mutual understanding to resolve the claim through a specific payment.
* The plaintiff’s acceptance of the payment was accompanied by a written statement indicating satisfaction of the debt. - Element 2. A tendered consideration was offered to cancel the original obligation under the contract. A tendered consideration means that one party proposed something of value to the other party to replace or cancel the original agreement, which is a key part of the Accord and Satisfaction Defense in contract law.
Facts that might support this element look like:
* The parties agreed that the payment of a lesser amount would satisfy the original debt, demonstrating a mutual understanding to modify the obligation.
* The debtor provided a check for a reduced amount, which the creditor accepted and cashed, indicating acceptance of the new terms.
* Both parties signed a written agreement stating that the new payment would extinguish the original contract obligation.
* The creditor acknowledged receipt of the tendered consideration in writing, confirming that it was in full satisfaction of the original debt.
* The debtor communicated their intent to settle the obligation with a lesser amount, and the creditor did not object to this proposal. - Element 3. The debtor intended this tendered consideration as complete satisfaction for the original obligation under the contract. The debtor meant for the payment they offered to fully settle the original debt, showing they believed this amount was enough to resolve the obligation outlined in the contract.
Facts that might support this element look like:
* The debtor explicitly stated in writing that the tendered payment was intended as full and final settlement of the outstanding obligation.
* The debtor provided a check marked “payment in full” on the memo line, indicating their intent to satisfy the debt completely.
* The debtor communicated verbally to the creditor that the offered amount was meant to resolve the entire debt, not just a partial payment.
* The debtor’s actions demonstrated a clear understanding that the tendered consideration was intended to extinguish the original obligation under the contract.
* The creditor accepted the payment without objection, suggesting mutual agreement that the tendered amount satisfied the debt in full. - Element 4. The debtor’s intent was made known to the creditor. In an Accord and Satisfaction Defense, this element means that the person who owes money clearly communicated their intention to settle the debt in a specific way, making it clear to the person they owe that they want to resolve the issue differently than originally agreed.
Facts that might support this element look like:
* The debtor explicitly communicated to the creditor that they intended to settle the debt for a lesser amount.
* The debtor sent a written proposal to the creditor outlining the terms of the proposed settlement.
* The creditor acknowledged receipt of the debtor’s offer and did not object to the terms presented.
* The debtor made a partial payment accompanied by a note stating it was for “full satisfaction” of the debt.
* The creditor accepted the payment without any indication of dispute regarding the debtor’s intent to settle. - Element 5. The creditor accepted the tendered consideration with the understanding that it completely satisfied the original obligation. The creditor agreed to accept the payment offered by the debtor, believing that this payment fully settled the original debt, meaning both parties understood that the new agreement replaced the old one.
Facts that might support this element look like:
* The creditor acknowledged receipt of the payment and stated it would settle the debt in full.
* The creditor provided a written confirmation indicating that the payment was accepted as complete satisfaction of the original obligation.
* The creditor continued to accept payments under the new agreement without disputing the original debt.
* The creditor verbally agreed to the terms of the settlement during a phone conversation with the debtor.
* The debtor and creditor executed a new contract that explicitly stated the original obligation was satisfied.
(See Key v. Lyle, No. M2009-01328-COA-R3-CV (TN Court of Appeals 2010). Pendergrass v. Ingram, Tenn: Court of Appeals 2016.)
If you’re in court without a lawyer and plan to assert a Defense of Accord and Satisfaction, having a Personal Practice of Law at Courtroom5 is essential. You’ll need to make informed decisions about what to file at each phase of your case and prepare legal documents that are supported by thorough legal research and a strong analysis of the facts. Equip yourself with the tools and knowledge necessary to effectively navigate your legal journey.
Prove Your TN Accord and Satisfaction Defense
U.S. Civil Cases Only