sue for breach of contract, the settlement (offer and acceptance of the $1000) constitutes an accord and satisfaction and is a valid defense to the borrower's lawsuit. 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. Consideration In an accord contract it is typical that the consideration supplied is less than bargained for in the original contract. In accord contracts that require an amount of consideration that is less than the original, the consideration must be of a different type, e.g. instead of money, debtor offers a car or a boat. See also Foakes v Beer - an old leading case on the exception of accord and satisfaction where the debt was not in dispute D & C Builders Ltd v Rees - where the creditor accepted the offer under duress Pinnel's Case - where the payment of a lesser amount was to be paid before the debt fell due Hirachand Punumchand v Temple - where the offeree was a 3rd party (the debtor's father) Part performance - related legal concept Jacob & Young, Inc. v. Kent, 230 N.Y. 239, (N.Y. App. 1921). References Debt Contract law