Accord and Satisfaction

"(a) If a person against whom a claim is asserted proves that (i) that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, (ii) the amount of the claim was unliquidated or subject to a bona fide dispute, and (iii) the claimant obtained payment of the instrument, the following subsections apply. For purposes of this subsection, a person does not act in good faith when tendering a check in full satisfaction of an obligation under a loan if (i) such check is for less than the amount due under the terms of the loan agreement and (ii) such check is tendered to a person without knowledge of a dispute concerning the loan.

(b) Unless subsection (c) applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim. (Va. Code Ann § 8.3A-311)

A creditor may compound or compromise with any joint contractor or co-obligor, and release him from all liability on his contract or obligation, without impairing the contract or obligation as to the other joint contractors or co-obligors. (Va. Code Ann § 11-10)"

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Common Law

At common law, “the burden is on a debtor to prove an accord and satisfaction. The ‘accord’ is the agreement that a debtor will give and the creditor will accept something in settlement of a disputed claim. As with all agreements, there must be an offer and an acceptance, i.e., ‘[t]he thing agreed to be given . . . in satisfaction must be offered and intended by the debtor as full satisfaction, and accepted as such by the creditor.’ If either the giving or the acceptance in satisfaction be lacking, an accord and satisfaction cannot exist.” John Grier Constr. Co. v. Jones Welding & Repair, Inc., 238 Va. 270, 383 S.E.2d 719; 1989 Va. LEXIS 144; 6 VLR 385; 9 U.C.C. Rep.Serv. 2d (Callaghan) 1214 (1989), citing, Atkins v. Boatwright, 204 Va. 450, 454, 132 S.E.2d 450, 453-54 (1963) and Virginia-Carolina Elec. Works v. Cooper, 192 Va. 78, 80, 63 S.E.2d 717, 719 (1951).
Comment: Accord and satisfaction is an affirmative defense. Johnston, Trial Handbook for Virginia Lawyers, §9.5 (1986), citing 29 Am Jur 2d, Evidence § 142.

Tender of Payment “in full satisfaction”

“[A]cceptance of a check on which appears ‘in full of account,’ or words of like import, does not in fact close the account unless it was accepted with intelligent appreciation of its possible consequences, coupled with knowledge of all relevant facts.” “The question whether the acceptance of a check or other remittance by a creditor in payment of an indebtedness to him amounts to an accord and satisfaction depends upon the circumstances surrounding the transaction, taking into consideration the conduct and declaration of the respective parties with relation thereto.” John Grier Constr. Co. v. Jones Welding & Repair, Inc., 238 Va. 270 383 S.E.2d 719; 1989 Va. LEXIS 144; 6 VLR 385; 9 U.C.C. Rep.Serv. 2d (Callaghan) 1214 (1989), citing, Mercury Insurance Co. v. Griffith, 178 Va. 9, 20, 16 S.E.2d 312, 316 (1941) and Kasco Mills v. Ferebee, 197 Va. 589, 593, 90 S.E.2d 866, 870 (1956).
Comment: Obtain competent legal advice before offering or accepting partial payment tendered as “payment in full” or “final payment.”

“Unlike the common law, however, the statute requires the claimant to overcome the presumption by satisfying an objective rather than a subjective test, that is, would a reasonable person have considered that the ‘instrument was tendered as full satisfaction of the claim?’” Gelles & Sons Gen. Contr., Inc. v. Jeffrey Stack, Inc., 264 Va. 285, 569 S.E.2d 406, 2002 Va. LEXIS 99, 48 U.C.C. Rep. Serv. 2d (Callaghan) 1429 (2002); citing, Webb Bus. Promotions, Inc. v. American Electronics & Entertainment Corp., 617 N.W.2d 67, 76 (Minn. 2000)

Comment: Accord and satisfaction is an affirmative defense. Johnston, Trial Handbook for Virginia Lawyers, §9.5 (1986), citing 29 Am Jur 2d, Evidence § 142. Comment: Obtain competent legal advice before offering or accepting partial payment tendered as “payment in full” or “final payment.”