Accord and Satisfaction

An accord and satisfaction is a legal term we face when an insurance company or patient writes “paid in full” on the check which is also known as an instrument. Some people do this in the belief that if they do this, they no longer owe anything on their debt. An accord is an offer to settle the debt for an amount that is less than what is owed. A satisfaction is an agreement to the accord. Some states have laws that regulate an accord and satisfaction. For example, under Florida Law, the law states the following:

673.3111 Accord and satisfaction by use of instrument.--

(1) If a person against whom a claim is asserted proves that that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, that the amount of the claim was unliquidated or subject to a bona fide dispute, and that the claimant obtained payment of the instrument, the following subsections apply.

 (2) Unless subsection (3) applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim. 

(3) Subject to subsection (4), a claim is not discharged under subsection (2) if either paragraph (a) or paragraph (b) applies: 

(a) The claimant, if an organization, proves that: 

1. Within a reasonable time before the tender, the claimant sent a conspicuous statement to the person against whom the claim is asserted that communications concerning disputed debts, including an instrument tendered as full satisfaction of a debt, are to be sent to a designated person, office, or place; and 

2. The instrument or accompanying communication was not received by that designated person, office, or place.

 (b) The claimant, whether or not an organization, proves that, within 90 days after payment of the instrument, the claimant tendered repayment of the amount of the instrument to the person against whom the claim is asserted. This paragraph does not apply if the claimant is an organization that sent a statement complying with subparagraph (a)1. 

(4) A claim is discharged if the person against whom the claim is asserted proves that within a reasonable time before collection of the instrument was initiated, the claimant, or an agent of the claimant having direct responsibility with respect to the disputed obligation, knew that the instrument was tendered in full satisfaction of the claim.

Now, why is it important for you to know this, it allows you to understand what to do when you get a check with Paid In Full written on it and you see that the patient still has a balance due. For example, Mr. Jones has a debt with the doctor for $350.00. He sends you a check for $1.00 and on the check, he writes “Paid In Full.” If you knowingly accept the check, then Mr. Jones settled his bill for $1.00. You can return the check to Mr. Jones declining his offer to settle his debt for $1.00.