Accord and Satisfaction - Issue 2

In cases where there is a genuine, ongoing dispute over the amount owed under a contract, and one party offers to settle the dispute by tendering a check that purports to be in full satisfaction of the contract, the other party's act of cashing the check can count as the acceptance required for an accord. Shea, Rogal & Associates, Ltd. v. Leslie Volkswagen, Inc., 216 Ill.App.3d 66, 71, 159 Ill.Dec. 540, 576 N.E.2d 209 (1991) (“the very act of knowingly accepting and cashing or depositing a check upon which conditional language has been added is the hallmark of an accord and satisfaction”) . If there is a bona fide dispute as to the amount due, it makes no difference that the creditor protests that he does not accept the amount proffered in full satisfaction. The creditor must either accept the payment with the condition upon which it is offered or refuse it. The acceptance of the check given in full satisfaction of a disputed claim is an accord and satisfaction if the creditor took the check with notice of the condition upon which the check was tendered. A creditor has no right to cash the check and thereby obtain the benefit of such offer without its accompanying burden of compromise. Boyer v. Buol Properties, LLC, 2014 IL App (1st) 132780, ¶ 57, 22 N.E.3d 389, 402.

“[T]he partial payment of a fixed and certain demand due and not in dispute does not constitute satisfaction of the entire debt even where the creditor agrees to receive partial payment for the whole debt and gives a receipt for the whole demand.” MKL Pre-Press Elecs., 840 N.E.2d at 692 (emphasis added). In other words, accord and satisfaction via a check occurs only where the amount owed is in dispute but the creditor nevertheless accepts the check, which may be a partial payment, that conspicuously states it is being made in satisfaction of the entire debt.