MBE Rules · Contracts
Discharge — accord & satisfaction
Restatement §281
The rule
An accord is an agreement to accept a stated performance in future satisfaction of an existing duty; satisfaction is the actual performance of the accord. The original duty is suspended (not discharged) until the accord is performed — upon performance, both the accord and the original duty are discharged. If the obligor breaches the accord, the obligee may sue on either the original duty OR the accord.
In plain English
Parties in a disputed or unliquidated debt can agree to settle for a different (often lesser) performance. The old obligation is only suspended — if the debtor pays under the new deal, everything is discharged; if the debtor breaches the new deal, the creditor picks which claim to sue on. Contrast with substituted contract, which immediately discharges the original duty.
Memory hook
Accord = agreement; Satisfaction = performance. Both required for discharge.
The trap
Cashing a check marked 'payment in full' on a genuinely disputed or unliquidated claim generally operates as accord and satisfaction, discharging the balance — even if the creditor writes 'under protest' on the check.
How examiners test it
Debtor sends smaller check marked 'paid in full' on a disputed bill; creditor cashes it and sues for the balance. If the debt was disputed or unliquidated, accord and satisfaction bars the suit.
Drill this rule until it can't fail you.
Vrenberg generates unlimited questions on this exact rule, tracks your mastery of it, and brings it back until it sticks.