Case No. 52 ACCORD AND SATISFACTION Court of Appeals 238 N.Y. 362, 144 N.E. 641
ID: 381508 • Letter: C
Question
Case No. 52 ACCORD AND SATISFACTION Court of Appeals 238 N.Y. 362, 144 N.E. 641 (1924) FACTS: Plaintiff H. Schnell and Co. (Schnell) sold to defendant Sol Perlmon (Perimon) carloads of spanish onions for an agreed price. When the shipments arrived a portion the onions were rotted and decayed. A government food products official inspected the onions and in a written report confirmed the presence of the decay. Perlmon paid for the onions but deducted $801.29 for the decayed portion. Payment was made by checks to which Perlmon attached letters informing Schnell that the checks were offered as payment in full. Schnell cashed the checks then sought payment of the $801.29 Perlmon had deducted. FIRST ISSUE: Where a seller cashes a check presented by a buyer as full payment ofa debt, the amount of which is disputed, can the seller pursue the buyer for the difference between the amount of the check and the amount the seller believes buyer owes? DECISION: No. REASONING: When the debtor offers as payment in full partial payment of a debt, the amount of which is disputed in good faith, and the creditor accepts the payment, the entire debt is deemed settled for the amount of the partial payment. SECOND ISSUE: Was the debt in this case liquidated or unliquidated? DECISION: Unliquidated: judgment for Perlmon. REASONING: Normally, when the parties in a contract agree on a price, the amount of money owed is not in dispute. However, where a seller does not perform as required by the contract, the buyer has a good-faith basis to dispute the amount owed to the seller. In this case, the buyer proved that a portion of the onions delivered by seller were rotted and decayed. Buyer's letters accompanying his checks also informed seller that buyer disputed e claim. The amount of the obligation owed in this case by buyer was disputed in good faith and therefore unliquidated d from the money he owed Schnell the amount of the claim. Schnell kept the Perlmon sent. The result was an accord and satisfaction; all claims for an mon had a claim against Schnell for damages for breach of contract checks additional nal money were relinquished by the acceptance of the offered amount.Explanation / Answer
The accord is the agreement to discharge the obligation between the two parties and satisfaction is the legal consideration which binds the two parties and make them function as per the agreement. In this particular case, the agreement is done between the buyer and the seller for the agreed price to purchase the onions. This acts as a legal consideration between the two parties. Later government food official inspected the consignment of the onions and in a written report confirmed the presence of the decay. This report was sent to the seller H Schnell & Co. as an evidence attached with the checks. Thus acting as an accord that the seller didnt discharge the obligation between the two parties.