ACCORD

AND
SATISFACTION

PROJECT PREPAIRED BY:-

TUKARAM SHRIRANG LAD
ROLL NO 19/131
1st Year LLB
 ACCORD AND SATISFACTION
LLB 1ST YEAR, TUKARAM SHRIRANG LAD, ROLL NO-19/131, SUB- LAW OF TORT
___________________________________

INDEX

SR. PG.
NO
NO NAME OF THE TOPIC

1 INTRODUCTION 3

2 PRINCIPLE OF ACCORD AND 7

SATISFACTION

3 PRINCIPLE OF ACCORD AND 10

SATISFACTION IN INDIA

4 CONCLUSION 13

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 ACCORD AND SATISFACTION
LLB 1ST YEAR, TUKARAM SHRIRANG LAD, ROLL NO-19/131, SUB- LAW OF TORT
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INTRODUCTION

Accord and Satisfaction, if described in layman terms, is the

purchase of a release from an obligation arising under Tort law or
Contract law by means of any valuable consideration (referred to as
Satisfaction) via an agreement (referred to as Accord). This agreement
may very well be conditional and there is no explicit legal burden for
such agreement to be written. It is essential, however, to note at this
point that both Accord and Satisfaction together bar the right of action,
and cannot do the same in their individual capacity.
In general, the right of action is not barred till the discharge
of the Satisfaction dictated by the Accord. If a person brings a right of
action to court before the discharge of the Satisfaction (delay in
discharge which does cannot reasonably give rise to the idea that there is
going to be a nonperformance of the same), then the defendant can no
longer refer to the Accord as a defense, but can sue the other party for
non-performance of the Accord.
Coming to the nature of Satisfaction and by extension, the
import of consideration in said mechanism, the nature of such may be
material (such as cash or kind) or executory (legal action or inaction) .
The delivery of something to which the other party is already legally
entitled to cannot be held as consideration, just as the payment of a
liquidated sum which is indisputably due in nature, unless consideration
justifies the abandonment of the excess such as situations which involve

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 ACCORD AND SATISFACTION
LLB 1ST YEAR, TUKARAM SHRIRANG LAD, ROLL NO-19/131, SUB- LAW OF TORT
___________________________________

payment at earlier dates or payments by third parties.

As in the case of all agreements, accord and satisfaction
brought about by fraud of either party ceases to be binding. Great
emphasis is placed on the wording of the Accord and a general trend is
that a party agrees to accept consideration for the known extent of harm
they suffer due to the other party’s action. In such agreements, if there is
to arise a new right of action arise from the same set of facts, the party
remains at liberty to seek remedy. However, there have also been
instances of accords that deal with the entire fact situation and bar any
future rights of action as well.
By virtue of this project, I seek to understand the
applicability of the Accord and Satisfaction principle in the
extinguishment of Tortious liability, contrast it to its popularity in
Contractual law and review cases in which the said principle is called
upon.

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 ACCORD AND SATISFACTION
LLB 1ST YEAR, TUKARAM SHRIRANG LAD, ROLL NO-19/131, SUB- LAW OF TORT
___________________________________

Review of Literature
The literature I seek to refer to in course of my research and analysis, as
of now, are:-
• Case Law
• Jstor.org
o This website shall be my reference in order to find academic
writings on the topic.
• The Law of Torts (Ratanlal & Dhirajlal) by Justice G P Singh
o This book forms part of my research as it analyses torts with great
depth.
• Clerk & Lindsell on Torts (Sweet & Maxwell)
o This book forms part of my research as it analyses torts with great
depth.
• Law of Torts (Eastern Book Company) by B.M. Gandhi
 This book forms part of my research as it analyses torts with
reference to the Indian Legal system.

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 ACCORD AND SATISFACTION
LLB 1ST YEAR, TUKARAM SHRIRANG LAD, ROLL NO-19/131, SUB- LAW OF TORT
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Research Questions
The main questions that I shall endeavor to answer by means of my
research are:
1. What are the parameters of Accord and Satisfaction?
2. What are the circumstances which arise in case of a breach of
Accord?
3. Which laws may govern the nature of Accords in the Indian
context?
4. Whether Accord and Satisfaction may be viewed as a form of
Alternative Dispute Resolution?

Methodology
This research project shall have a doctrinal approach, by virtue of its
analysis of literature.
Scheme of Chapterization
The scheme of chapterization of the research project is as follows.
It begins with an introduction to the research topic, which Accord and
Satisfaction. It progresses to the next chapter, which deals with the same
principle in greater depth.
The third chapter outlines the circumstances that surround a breach of an
accord, whereas the fourth chapter serves to highlight the presence of the
principle in the Indian context.
Finally, the concluding chapter offers the remarks observed by the
researcher and seeks to crystallize the research project for the reader.  

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 ACCORD AND SATISFACTION
LLB 1ST YEAR, TUKARAM SHRIRANG LAD, ROLL NO-19/131, SUB- LAW OF TORT
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PRINCIPLE OF ACCORD AND SATISFACTION

The rationale behind the principle of Accord and satisfaction

precedes the recognition of the validity of simple contracts, since the
base assertion is that when anything is accepted in satisfaction of the
damages caused by a tort would bar subsequent actions against the tort
feasor.
Accord and Satisfaction, if described in layman terms, is the
purchase of a release from an obligation arising under Tort law or
Contract law by means of any valuable consideration (referred to as
Satisfaction) via an agreement (referred to as Accord).
This agreement may very well be conditional and there is no
explicit legal burden for such agreement to be written. It is essential,
however, to note at this point that both Accord and Satisfaction together
bar the right of action, and cannot do the same in their individual
capacity.
The bedrock of deliberation in terms of the assessment with
regards to the principle of Accord and Satisfaction is whether a tortious
obligation exists and as such what are the features of the same.
In order to analyze an Accord, there are two fundamental
questions that must be answered .The first is whether an obligation is
liquidated or not and whether it is a disputed matter or not.

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 ACCORD AND SATISFACTION
LLB 1ST YEAR, TUKARAM SHRIRANG LAD, ROLL NO-19/131, SUB- LAW OF TORT
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Liquidated or Unliquidated
Liquidated means agreed upon by the parties after
deliberation or determined by the legal process after due deliberation or
assessment. However, unliquidated refers to unassessed procedures. For
example, if an attorney charges his or her client a sum of say x rupees
prior to the tender of the work, it is liquidated, however if the fees
depend upon the work tendered and as such are to be assessed at a later
stage.
This is necessary, because it shapes to a great extent the
quantum of satisfaction. Also, in cases where liquidated damages arise,
the mere fulfillment of the same is not held to be satisfaction as the
person was anyhow expected to fulfill such conduct.

Disputed or Undisputed
An obligation to be disputed requires that a defense be raised
by the obligor in good faith.
Accord is an agreement that parties reach after deliberation.
Yet the fact that this doctrine precedes the validity of simple contracts, it
is an inference that what is enshrined is not the agreement, but the level
of satisfaction of the parties involved in the dispute.
This agreement, since has legal sanctions, is governed by the
same rules that govern contracts and are subject to the same guidelines
that conduct the nature of the same. In order to draw a parallel,
satisfaction can be projected as the consideration to this agreement,
which discharges the tortfeasors and bars the remedy to the wrong.

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 ACCORD AND SATISFACTION
LLB 1ST YEAR, TUKARAM SHRIRANG LAD, ROLL NO-19/131, SUB- LAW OF TORT
___________________________________
When the question of Satisfaction is raised, it is imperative to
note that a preexisting duty cannot serve as consideration as it is
something the court would find within the normal conduct of an
individual and as such not view it is a fair incentive for a party to change
their stance on an issue.
Accord without satisfaction does not discharge right of action
and as such liability is discharged only when the satisfaction is delivered
and acknowledged.
It is also noteworthy that the impact of the accord depends
upon the conditions mentioned. For example, if an accident occurs, there
can be two forms of Accord. One which discharges total liability from
any right arising from accident and the other which only negates the said
right of action and leaves room for further litigation. 

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 ACCORD AND SATISFACTION
LLB 1ST YEAR, TUKARAM SHRIRANG LAD, ROLL NO-19/131, SUB- LAW OF TORT
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PRINCIPLE OF ACCORD AND SATISFACTION IN
INDIA
A prima facie analysis of the judicial mentions of the
principle of Accord and Satisfaction show that in Status Quo, the
principle expresses itself more in the annals of Contractual law than in
Tort Law. There is also this peculiar trend of this principle being brought
up in arbitration trials.
Union of India vs. M/s Ajit Mehta and Associates, Pune and Others
In the cited case, the problem put forward for the contention of the court
was whether or not the parties in question could invoke the arbitration
clauses under the Sections 30 and 33 of the Arbitration Act, 1940, even
after a full and final settlement was made in respect to the claims. The
awards were set aside, for the courts contended that not only were the
arbitration proceedings illegal due to the end of contractual relations
between parties by exercise of Accord and Satisfaction.
P.K. Ramaiah and Company v. Chairman & Managing Director,
National Thermal Power Corporation
The matter before the courts was that the appellant, who pursued further
amounts after the completion of the work. It was recognized that the
appellant acknowledged the respondent’s inaction despite his promise to
act out the claim by means of Clause 57 of the contract that bound the
two, and as such accepted the final measurement, which by extension
was an acceptance to full and final settlement.
It was held that through a receipt procured in writing, the full and final
satisfaction was acknowledged by admission and as such the amount

was received unconditionally. Therefore by virtue of the settlement of

claims, there exists accord and satisfaction. In Russal on Arbitration,

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 ACCORD AND SATISFACTION
LLB 1ST YEAR, TUKARAM SHRIRANG LAD, ROLL NO-19/131, SUB- LAW OF TORT
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19th Ed., p. 396, it is stated that “an accord and satisfaction may be
pleaded in an action on award and will constitute a good defense.”
The final verdict held that no dispute could be referred to for arbitration
by virtue of amount being accepted in full settlement of a claim.

Union of India v. Kishorilal Gupta and Bros

The case in question decided what Accord and Satisfaction are in
relation to the existence of liability. The courts contended that Accord
and Satisfaction do not vitiate the liability, but merely the action that
arose from the same.

Saraswat Trading Agency v. Union of India

The facts of this case deal with the application to set aside a reward
decreed by the court, since the defendants in the prior case had tried to
persuade the plaintiff to accept a lesser award.
A few important parameters in regard to accord and satisfaction were
drawn by means of this case. According to the law of accord and
satisfaction, a person who is entitled to benefit from the performance of
a promise may accept something which he or she finds more beneficial
than the original promise. It is interesting to know that the law does not
prescribe the quantum of such deals. Therefore, accord is essentially a
special agreement that has as its foundation some other earlier
agreement.

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 ACCORD AND SATISFACTION
LLB 1ST YEAR, TUKARAM SHRIRANG LAD, ROLL NO-19/131, SUB- LAW OF TORT
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Satisfaction, on the other hand, Satisfaction is “the performance of the
different promise as per the new agreement of accord and its acceptance
by the promisee”.
The Supreme Court had taken the stance while clarifying
that accord and satisfaction depends from case to case and that the court
has to find out if the lesser some or a different performance has been
accepted by the promise in full satisfaction or not.

S.C. Konda Reddy v. Union of India and Anr

The contention of the courts in relation to this case was whether the
payment of the final bill could be used as a means of showing that an
accord existed, satisfaction was performed and as such the agreement
ended and the arbitration clause too is extinguished? The court
acknowledged the status of accord and satisfaction as tools used to
discharge a contract and its use as a defense against an action for the
breach of contract. However, it would not have an effect on the
extinguishment of the contract.
The court comments how an accord plays the role of releasing the
obligation that arises out of an action. So basically an accord and
satisfaction that has secured a release from such an obligation is actually
based upon the existence of the contract and does not treat the contract
itself as non-existent. So that means that the contract is not obliterated
but what ceases to be enforceable is the obligations that were under it.
Therefore, accord and satisfaction stands to be a good defense when
some action is brought for an appropriate remedy for the non-
performance of these obligations. The defense should not be construed
to be that the contract comes to append but that its breach is satisfied by
accord and satisfaction.
 

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 ACCORD AND SATISFACTION
LLB 1ST YEAR, TUKARAM SHRIRANG LAD, ROLL NO-19/131, SUB- LAW OF TORT
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CONCLUSION
Accord and Satisfaction is thus a principle that seeks to find the middle
ground between the interests of the wronged party and the wrongdoer. It
is a rationale that is prominent in the human condition and as such has
been used since time immemorial. In status quo, stressing upon the
backlog of cases that plague the Indian courts and the need for alternate
methods of resolution, it is the researcher’s opinion that the doctrine
could prove to be a very effective tool in resolving the crisis. There is
wide scope for the subject in the global arena yet the need to highlight
its efficacy in the field of torts is a burden that the legal system must
take upon its self.
Accord and Satisfaction provide an avenue of collaborative balance of
interests, thus easing the burden on the parties by view of a subjective
interpretation of the same. However, the boon is also a bane, since an
unwitting individual may very well waive his rights for inadequate
compensation and may be exploited.

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 ACCORD AND SATISFACTION
LLB 1ST YEAR, TUKARAM SHRIRANG LAD, ROLL NO-19/131, SUB- LAW OF TORT
___________________________________

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