An honest dispute arises over whether plumbing installed in a condominium meets contractual specifications. The owner offers to pay $10,000 if the plumber replaces the plumbing with a different grade of pipe. The plumber accepts. After replacement, the owner refuses to pay. A fact-finder finds the original plumbing satisfied the contract, and that the parties entered into a substitute agreement. What amount should be awarded?

• A. $15,000
• B. $0
• C. $10,000
• D. $5,000

Answer: (C)

Accord and satisfaction applies when there’s a bona fide dispute about performance, and the parties agree to substitute a different performance in exchange for a payment. Here, there was an honest dispute over whether the plumbing met contract specs, so the owner offered to pay to replace the pipe with a different grade, and the plumber accepted. That exchange creates an accord: the original performance obligation is substituted with the new one for the agreed amount. When the substitution is completed, the original contract claim is discharged by satisfaction of the accord. The fact-finder’s finding that the original plumbing satisfied the contract confirms the dispute was genuine, and the substitute agreement is what governs the payment. Therefore, the owner owes the agreed amount for the substituted performance: 10,000.