A contract is usually discharged by performance of the terms of the agreement. The parties may agree to a different performance. This is called an accord. When the accord is performed, this is called an accord and satisfaction. The original obligation is discharged.
In order for there to be an accord and satisfaction, there must be
(1) a bona fide dispute;
(2) an agreement to settle the dispute; and
(3) the performance of the agreement.
Agreement to Settle Claim when Amount of Claim Undetermined Agreement made the (date), between (Name of Creditor), of (street address, city, state, zip code), hereinafter referred to as Creditor, and (Name of Debtor) of (street address, city, state, zip code), hereinafter referred to as Debtor. Whereas, Creditor, over a number of years, has advanced moneys to Debtor in various amounts and at various periods of time, commencing on (date), up to and including (date); and Whereas, the total amount of said advances cannot be determined because of the insufficiency or inadequacy of the records of both parties; and Whereas, the parties desire to make a complete and final settlement between them of their accounts; Now, therefore, for and in consideration of the mutual covenants contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Amount to be Paid It is agreed that Debtor shall pay to Creditor $______________, and Creditor shall accept this amount, in full and complete satisfaction of the indebtedness of Debtor resulting from the advances mentioned above. 2. Payment Schedule Debtor shall make payment to Creditor of the above-mentioned amount as follows: (describe method of payment, including dates and places for making payments and the amounts). 3. Effect of Full Payment On full payment by Debtor to Creditor of $_____________ as provided above, the original indebtedness of Debtor to Creditor, resulting from the advances described in Section 1 above, shall forever be cancelled and discharged. 4. Severability The invalidity of any portion of this Agreement will not and shall not be deemed to affect the validity of any other provision. If any provision of this Agreement is held to be invalid, the parties agree that the remaining provisions shall be deemed to be in full force and effect as if they had been executed by both parties subsequent to the expungement of the invalid provision. 5. No Waiver The failure of either party to this Agreement to insist upon the performance of any of the terms and conditions of this Agreement, or the waiver of any breach of any of the terms and conditi
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