What is "accord and satisfaction" in contractual terms?

"Accord and satisfaction" refers to a legal agreement that resolves a dispute arising from a previous contract. In this context, it involves two parties reaching a new agreement (the accord) where one party offers something different from what was originally stipulated in the contract, and the other party accepts it as full satisfaction of their original claim or obligation.

In essence, the "accord" represents a new contractual agreement to settle the differences from the previous contract, while "satisfaction" occurs when the agreed-upon terms are performed, thereby fulfilling the obligation. This legal concept is crucial in contract law as it prevents parties from pursuing further claims after an agreement has been reached and executed.

The other options do not accurately capture the essence of "accord and satisfaction." A previous agreement that is void does not pertain to a resolution of a dispute; an agreement for future performance does not settle past claims nor affect the original obligations; and a court-enforced settlement involves legal intervention rather than a mutual agreement outside of court to resolve past obligations. Thus, the concept of accord and satisfaction is distinctly about resolving existing contractual disputes through a new agreement.