On April 1, a buyer agreed in writing to purchase an antique car for $20,000. On April 10, the buyer accepted the car and paid $15,000 with a check marked 'This check is in full and final satisfaction of my obligation under our April 1 agreement.' The seller deposited the check. If the buyer sues for the $5,000 difference, will the accord and satisfaction defense likely succeed?

• A. No, because the buyer did not dispute the initial purchase price.
• B. Yes, because the notation shows full satisfaction.
• C. Yes, because the buyer offered a settlement.
• D. No, because the seller deposited the check.

Answer: (A)

Accord and satisfaction discharge a debt only when there is a genuine dispute about the amount owed and the debtor offers to settle that disputed claim for a lesser amount, with the creditor accepting the settlement in full satisfaction. Here, the contract fixed the price at $20,000. The buyer’s payment of $15,000 accompanied by a check stating it is in full satisfaction does not show a bona fide dispute about the amount owed; it looks like a voluntary partial payment tied to a label of “full satisfaction,” not a negotiated settlement of a disputed debt. Since there was no real dispute over owing $20,000, there is no accord and satisfaction, and the seller can pursue the remaining $5,000. The mere notation and the act of depositing the check do not create an effective accord and satisfaction in the absence of a genuine dispute.