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ACCORD & SATISFACTION & RESTRICTIVE ENDORSEMENT
So many consumers half heartily fill out letters to collectors and collection agencies and find themselves in a whole lot of trouble. Before you begin to delve into "playing lawyer" you had better understand what your goal is and what tool to use when approaching the subject of accord and satisfaction and contract law. It's understandable that consumers get this information wrong because there is so much of it out there and with state and federal rules, one is never sure -so before you open a can of worms understand that you need to consider the outcome and that it may be a bad one.

I am going to try and explain the difference between the two most common settlement tactics. Restrictive Endorsements and Accord and Satisfaction. It may sound confusing but basically a restrictive endorsement creates an accord and satisfaction, by creating a contract that is binding between two parties but... there can be no accord without satisfaction (meaning the other party needs to accept, not be forced or deceived). Below are two scenarios to review.

Restrictive Endorsements: purpose and meaning
Before using a restrictive endorsement agreement, check with your State Attorney General, or a local attorney to see if this type of agreement is binding in your state and county. State laws vary. What is a Restrictive Endorsement? Well first of all just look what Capital one thinks about RE's. Capital One refuses to honor RE's and places this disclaimer on their site to help their position.

Wiki Fact
Accord and satisfaction is a contract law concept about the purchase of the release from a debt obligation. The payment is typically less than what is owed and is not paid by the actual performance of the original obligation. The accord is the agreement to discharge the obligation and the satisfaction is the legal "consideration" which binds the parties to the agreement. If a person is sued over an alleged debt they bear the burden of proving the affirmative defense of accord and satisfaction.

The accord agreement must be transacted on a new agreement. It must therefore have the essential terms of a contract, (parties, subject matter, time for performance, and consideration). If there is a breach of the accord there will be no "satisfaction" which will give rise to a breach of accord. In this instance the non-offending party has the right to sue under either the original contract or the accord agreement.

A valid accord does not discharge the prior contract, it suspends the right to enforce it in accordance with the terms of the accord contract, in which satisfaction, or performance of the contract will discharge both contracts (the original and the accord). If the creditor breaches the accord, then the debtor will be able to bring up the existence of the accord in order to enjoin any action against him. Related to this would be offer and acceptances.

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