Accord and Satisfaction
The Middle Section Court of Appeals issued a ruling in December that is a textbook lesson in the law of accord and satisfaction. An accord and satisfaction essentially means that the plaintiff and defendant have already agreed to settle their claims, and that the settlement has been paid off. The Court of Appeals set out the elements that must be proven to estabilsh an accord and satisfaction:
This includes the terms of the accord (the new agreement), satisfaction by performance or that the payment was offered on the condition that, if accepted, it would be in full settlement of the demand, and that the creditor understood the conditions of the tender or the circumstances under which it was made were such that he was bound to understand.
The case, LDI Design, LLC v. Glenn G. Dukes, illustrates the effect of having an accord and satisfaction as an affirmative defense. In the case, the defendant proved that the parties had, in fact, agreed to settle their differences. However, the defendant did not prove that the agreement was broad enough to cover all of the plaintiff's claims. The defendant lost the argument, then, because as an affirmative defense the burden of proving all of the elements (including the terms of the agreement) is on the defendant.
If you're dealing with an accord and satisfaction issue, this is a solid example of the rule. Like a lot of business deals, there were claims and counterclaims and third-party claims all mixed into this one. For simplicity, I've simply referred to them as the plaintiff and defendant, rather than diving into the procedural posture.