Accord and Satisfaction

"A claim is dicharged if a person against whom a claim is asserted proves that: (1) they, in good faith,tendered an instrument to the claimant as full satisfaction of the claim (2) the amount of the claim was unliquidated or subject to a bona fide dispute (3) the claimant obtained payment of the instrument; and (4) the instrument or an accompanying written communication contained a conspicuous statement that the instrument was tendered as full satisfaction of the claim

A claim is also discharged if the person against whom the claim is asserted proves that within a reasonable time before collection of the instrument was initiated, the claimant, or an agent of the claimant having direct responsibility with respect to the disputed obligation, knew that the instrument was tendered in full satisfaction of the claim. N.C. Gen. Stat. § 25-3-311"

"An 'accord' is an agreement whereby one of the parties undertakes to give or perform, and the other to accept, in satisfaction of a claim, liquidated or in dispute, and arising either from contract or tort, something other than or different from what he is, or considered himself entitled to; and a 'satisfaction' is the execution or performance, of such agreement."" Zanone v. RJR Nabisco, 120 N.C. App. 768, 772 (1995) (quoting Allgood v. Trust Co., 242 N.C. 506, 515, (1955)). ""The word 'agreement' implies the parties are of one mind - all have a common understanding of the rights and obligations of the others - there has been a meeting of the minds…Agreements are reached by an offer by one party and an acceptance by the other. This is true even though the legal effect of the acceptance may not be understood."" Zanone, 120 N.C. App. at 772. Thus, when there is dispute as to the amount due, and the debtor tenders an amount as ""payment in full,"" which the creditor accepts, then accord and satisfaction has occurred.

The doctrine of accord and satisfaction has been codified in North Carolina, if the payment is made by check. ""Article 3 of the Uniform Commercial Code is invoked when a dispute arises over a payment made with a negotiable instrument…"" Futrelle v. Duke Univ., et al., 127 N.C. App. 244, 248 (1997)."