Law Lessons from TJD ARCHITECTS V. CERVINI’S AUTO DESIGNS, App. Div., A-2946-08T1, March 2, 2010:

To be effective, an accord and satisfaction “necessitates a finding that the party making the tender and the party accepting the tender each intends the acceptance to serve as full satisfaction of the entire disputed obligation.” Zeller v. Markson Rosenthal & Co., 299 N.J. Super. 461, 466 (App. Div. 1997).

The elements of accord and satisfaction are: “(a) a bona fide dispute as to the amount owed; (b) a clear manifestation of intent by the debtor to the creditor that payment is in satisfaction of the disputed amount, and (c) acceptance of satisfaction by the creditor.” Loizeaux Builders Supply Co. v. Donald B. Ludwig Co., 144 N.J. Super. 556, 564-65 (Law Div. 1976) (citing U.S. ex rel. Glickfeld v. Krendel, 136 F. Supp. 276, 282 (D.N.J. 1955)).

In Peterson v. Hartford Accident & Indemnity Co., 32 N.J. Super. 23, 31 (App. Div. 1954) (quoting Rose v. American Paper Co., 83 N.J.L. 707, 709 (E. & A. 1912)), the court set forth this guiding principle:

The party seeking to settle for a less sum than is claimed to be due must, by his words or conduct when making the offer, clearly inform the other of what is sought and expected. The transaction must be such that the condition is as plain as the tender, so that the acceptance of the tender will involve the acceptance of the condition. In other words, the tender and the condition must be incapable of severance; for otherwise the inference will not be drawn that the acceptance of the tender involves the acceptance of the condition.

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