Frequently Asked Questions

What are the conditions listed by the Uniform Commercial Code for satisfaction of an accord and satisfaction agreement?

The Uniform Commercial Code (UCC) outlines specific conditions for the satisfaction of an accord and satisfaction agreement. Firstly, the debtor must have given something to the creditor in good faith as full satisfaction of the debt. Secondly, the original debt amount should not have been liquidated or subject to a dispute. Thirdly, the creditor must have received the payment. Lastly, the payment or accompanying written communication must contain a conspicuous statement indicating that the given amount will lead to full satisfaction of the original debt. However, the settlement will not be valid under certain circumstances. For instance, if the debtor can prove that they were sent a conspicuous statement before the amount was sent, instructing them to send any payment intended as full satisfaction to a designated person, office, or place, and the payment was not sent to that designated location. Additionally, if the creditor can prove that they returned the payment given to them as full payment within 90 days, the settlement will also be invalid.