Accord & Satisfaction

Legal principles concerning releases and covenants not to sue — Whether settlement deed an accord and satisfaction or accord and conditional satisfaction: Scaffidi v Perpetual Trustees Victoria Ltd [2011] WASCA 159 at [14] – [33]

The distinction between accord executory and accord and satisfaction remains valid and as important as ever. An accord executory neither extinguishes the old cause of action nor affords a new one. … The distinction depends on what exactly is agreed to be taken in place of the existing cause of action or claim. An executory promise or series of promises given in consideration of the abandonment of the claim may be accepted in substitution or satisfaction of existing liability. Or, on the other hand, promises may be given by the party liable that he will satisfy the claim by doing an act, making over a thing or paying an ascertained sum of money and the other party may agree to accept, not the promise, but the act, thing or money in satisfaction of his claim. If the agreement is to accept the promise in satisfaction, the discharge of the liability is immediate; if the performance, then there is no discharge unless and until the promise is performed: McDermott v Black (1940) 63 CLR 161 at 184–185 (Referred to in Perpetual Trustees Victoria Ltd v Scaffidi [2010] WASC 401)