What is accord and satisfaction when an obligation is released by means of valuable consideration?
Alberta, Canada
The following excerpt is from Penney v. Vipond Inc., 2011 ABQB 785 (CanLII):
Accord and satisfaction occurs when an obligation is released by means of valuable consideration other than the performance of the obligation itself. The Judicature Act states that part performance of an obligation, either before or after a breach, extinguishes the obligation when it is expressly accepted by a creditor in satisfaction, or when it is rendered pursuant to an agreement that it will satisfy the obligation. This section can be relied upon to end a claim where there has been a settlement: Middleton v. Bristol-Myers Canada Inc. [1988] B.C.W.L.D. 1491 at para. 44.
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