#contract #discharge #law
There was a preliminary issue of accord and satisfaction in a case to which reference was made in Chapter 6 on promissory estoppel, namely D & C Builders v Rees [1966] 2 QB 617. In that case, the defendant owed the plaintiffs £482 for work they had done. The defendant's wife telephoned the plaintiffs and said: 'My husband will offer you £300 in settlement. That is all you'll get. It is to be in satisfaction'. The defendant gave the plaintiffs a cheque for £300, asking for a receipt, and insisting on the words, 'in completion of account'. The plaintiffs then brought an action to recover the balance of £182. On a preliminary point whether there was accord and satisfaction, it was held by the county court judge that taking the cheque for £300 did not discharge the debt of £482. The defendant appealed and the Court of Appeal held that there was no accord and satisfaction because the defendant's wife had pressured the plaintiffs to accept the £300 in settlement by threatening that nothing would be paid. As a consequence, there was no true accord and satisfaction and the plaintiffs were entitled to recover the balance. As Danckwerts LJ, stated:
The giving of a cheque of the debtor for a smaller amount than the sum due is very different from "the gift of a horse, hawk, or robe, etc." mentioned in Pinnel's Case. I accept that the cheque of some other person than the debtor, in appropriate circumstances, may be the basis of an accord and satisfaction, but I cannot see how in the year 1965 the debtor's own cheque for a smaller sum can be better than payment of the whole amount of the debt in cash. I agree also that, in the circumstances of the present case, there was no true accord.
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