UK Accounting Glossary
Accord and Satisfactions refer to the discharge of an obligation arising under Tort law.
This is a device enables one party in a contract to avoid an obligation that arises under said contract; provide that the other concerned parties agree.
The accord is the agreement by which an contractual obligation is discharged, and the satisfaction is the consideration making the agreement legally sound.
Such an agreement only discharges the contractual obligation if it is accompanied by consideration.
For example; under a contract of sale the seller of goods may discharge the contractual obligation by delivering goods of different quality to that specified in the contract (in the form of a substitution), provided that there is an agreement from the buyer (the accord) and that a reduction in the contracted price (the satisfaction) is offered and accepted.
The seller has therefore “purchased” release from said obligation.
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Definitions for Accord And Satisfaction are sourced/syndicated and enhanced from:
This glossary post was last updated: 27th January 2019.