2009 California Civil Code - Section 1521-1526 :: Chapter 4. Accord And Satisfaction

SECTION 1521-1526

[1521.]  Section Fifteen Hundred and Twenty-one. An accord is an
agreement to accept, in extinction of an obligation, something
different from or less than that to which the person agreeing to
accept is entitled.

1522.  Though the parties to an accord are bound to execute it, yet
it does not extinguish the obligation until it is fully executed.

1523.  Acceptance, by the creditor, of the consideration of an
accord extinguishes the obligation, and is called satisfaction.

[1524.]  Section Fifteen Hundred and Twenty-four. Part performance
of an obligation, either before or after a breach thereof, when
expressly accepted by the creditor in writing, in satisfaction, or
rendered in pursuance of an agreement in writing for that purpose,
though without any new consideration, extinguishes the obligation.

1525.  It is the public policy of this State, in the best interests
of the taxpayer and of the litigant, to encourage fair dealing and to
promote justice by reducing litigated matters to the lowest level of
   In case of a dispute over total money due on a contract and it is
conceded by the parties that part of the money is due, the debtor may
pay, without condition, the amount conceded to be due, leaving to
the other party all remedies to which he might otherwise be entitled
as to any balance claimed.
   If any conditions are attached to the payment, this section shall
not be deemed to have limited the remedies available to the other
party under other provisions of law on the original amount claimed.

1526.  (a) Where a claim is disputed or unliquidated and a check or
draft is tendered by the debtor in settlement thereof in full
discharge of the claim, and the words "payment in full" or other
words of similar meaning are notated on the check or draft, the
acceptance of the check or draft does not constitute an accord and
satisfaction if the creditor protests against accepting the tender in
full payment by striking out or otherwise deleting that notation or
if the acceptance of the check or draft was inadvertent or without
knowledge of the notation.
   (b) Notwithstanding subdivision (a), the acceptance of a check or
draft constitutes an accord and satisfaction if a check or draft is
tendered pursuant to a composition or extension agreement between a
debtor and its creditors, and pursuant to that composition or
extension agreement, all creditors of the same class are accorded
similar treatment, and the creditor receives the check or draft with
knowledge of the restriction.
   A creditor shall be conclusively presumed to have knowledge of the
restriction if a creditor either:
   (1) Has, previous to the receipt of the check or draft, executed a
written consent to the composition or extension agreement.
   (2) Has been given, not less than 15 days nor more than 90 days
prior to receipt of the check or draft, notice, in writing, that a
check or draft will be tendered with a restrictive endorsement and
that acceptance and cashing of the check or draft will constitute an
accord and satisfaction.
   (c) Notwithstanding subdivision (a), the acceptance of a check or
draft by a creditor constitutes an accord and satisfaction when the
check or draft is issued pursuant to or in conjunction with a release
of a claim.
   (d) For the purposes of paragraph (2) of subdivision (b), mailing
the notice by first-class mail, postage prepaid, addressed to the
address shown for the creditor on the debtor's books or such other
address as the creditor may designate in writing constitutes notice.

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