Section Fifteen Hundred and Twenty-one. 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.
Extinction of ObligationsAccord and Satisfaction
Section § 1521
An accord is a deal where someone agrees to accept something different or less than what they are actually owed, as a way to settle a debt or obligation.
accord agreement extinction of obligation
Section § 1522
This law says that if two parties make an agreement called an 'accord' to settle a dispute, they still have to follow through with what they agreed upon. However, the original obligation isn't considered fully resolved or wiped out until they actually complete the terms of the accord.
Though the parties to an accord are bound to execute it, yet it does not extinguish the obligation until it is fully executed.
accord binding agreement execute
Section § 1523
If a creditor agrees to accept something different than originally owed, and then actually accepts it, the original obligation is considered fulfilled and is called satisfaction.
Acceptance, by the creditor, of the consideration of an accord extinguishes the obligation, and is called satisfaction.
accord consideration creditor acceptance
Section § 1524
If someone partially fulfills what they owe, and the person they owe agrees in writing to accept it as full payment for what is owed, then the debt is considered completely settled, even if no extra benefit or payment is made.
Section Fifteen Hundred and Twenty-four. Part performance of an obligation, either before or after a breach thereof, when expressly 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.
part performance obligation breach
Section § 1525
This law is about encouraging fairness and justice in resolving disputes about how much money is owed on a contract. If the parties agree that a part of the money is definitely due, the person who owes money can pay that amount without any conditions. This allows the other person to still pursue other legal actions for any money they believe is still owed. However, if conditions are added to the payment, the other party can rely on other legal options since this specific rule won't apply.
It is the public policy of this State, in the best interests of the taxpayer and of the litigant, to encourage fair dealing and to promote justice by reducing litigated matters to the lowest level of jurisdiction.
In case of a dispute over total money due on a contract and it is conceded by the parties that part of the money is due, the debtor may pay, without condition, the amount conceded to be due, leaving to the other party all remedies to which he might otherwise be entitled as to any balance claimed.
If any conditions are attached to the payment, this section shall not be deemed to
have limited the remedies available to the other party under other provisions of law on the original amount claimed.
public policy taxpayer interests litigant
Section § 1526
This law explains when accepting a check marked 'payment in full' can settle a debt entirely, known as 'accord and satisfaction.' Normally, if you didn't realize what was on the check or you crossed out that wording, cashing it won't settle the whole debt. Exceptions arise if the check is part of a broader deal with all creditors getting similar treatment, and you knew about the deal, or if the check comes with releasing a claim. Lastly, if you're notified in writing about the check having restrictions at least 15 days in advance, this notice counts even if it's just mailed to an address on record.
(a)CA Civil Law Code § 1526(a) 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.
(b)CA Civil Law Code § 1526(b) Notwithstanding
subdivision (a), the acceptance of a check or draft constitutes an accord and satisfaction if a check or draft is tendered pursuant to a composition or extension agreement between a debtor and its creditors, and pursuant to that composition or extension agreement, all creditors of the same class are accorded similar treatment, and the creditor receives the check or draft with knowledge of the restriction.
A creditor shall be conclusively presumed to have knowledge of the restriction if a creditor either:
(1)CA Civil Law Code § 1526(1) Has, previous to the receipt of the check or draft, executed a written consent to the composition or extension agreement.
(2)CA Civil Law Code § 1526(2) Has been given, not less than 15 days nor more than 90 days prior to receipt of the check or draft, notice, in writing, that a check or draft will be tendered with a restrictive endorsement and that acceptance
and cashing of the check or draft will constitute an accord and satisfaction.
(c)CA Civil Law Code § 1526(c) Notwithstanding subdivision (a), 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.
(d)CA Civil Law Code § 1526(d) For the purposes of paragraph (2) of subdivision (b), mailing the notice by first-class mail, postage prepaid, addressed to the address shown for the creditor on the debtor’s books or such other address as the creditor may designate in writing constitutes notice.
accord and satisfaction payment in full disputed claim
