The term ‘accord‘ signifies the ‘agreement’. The term ‘satisfaction’ indicates the ‘consideration which pacifies the aggrieved party’.
A publishes certain defamatory matter against B. B sues A for defamation claiming rupees two lakhs as damages.
B offers apology to A, and offers to pay Rs. fifty thousand towards the damages. A satisfies with the apology tendered by B and with the amount offered.
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Thereby an agreement is concluded between them. When the agreement concluded between them is called ‘accord’, and the efforts of B to satisfy A is called ‘satisfaction’, and finally this arrangement is called ‘accord and satisfaction’.
Accord’ without ‘satisfaction’ doesn’t bar the right of action of the aggrieved party. However, where ‘satisfaction’ is made by a promise to pay the damages at a future date makes the full stop to the liability or obligation concerned, i.e. the defendant is discharged from the obligation.
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Where if the defendant fails to pay the amount at the stipulated date, the plaintiff can sue the defendant for the recovery of such amount as per the accord.
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In the first instance, it was ‘unliquidated damages’, because the damages are claimed by the aggrieved party after the tortious liability arises. In the second instance, it is ‘liquidated damages’.
The damages in the second instance, is so called as ‘liquidated damages’, because in the ‘accord and satisfaction’, which is a contract between the parties, itself the amount of damages is fixed by mutual consent of the parties.