Question

Gustaf and Hilltop Country Club disagree as to the exact amount Hilltop owes Gustaf for his landscaping work. They form a new agreement that, on fulfillment, will discharge the prior obli­gation. This is:

Answer 1

Answer:   An accord and satisfaction

Explanation:  When the original contract, claim or debt is replaced by a new legal contract where all parties have agreed to compensation and where that amount differs from the amount in the original original contract, then it is an accord and satisfaction. This can happen as in this case where there is a disagreement about the debt owed to the original contract, i.e when one of the parties considers that the entire amount of the debt has not been paid, whether due to some omission in the contract or any other omission. Then a new contract is signed to regulate the unpaid portion, thereby paying the debt from the original contract, which is an accord and satisfaction.