“Pursuant to section 1521 of the Civil Code, 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.” The Restatement [2d] of Contracts [] defines an “accord” as “a contract under which an obligee promises to accept a stated performance in satisfaction of the obligor’s existing duty.” California courts have defined “accord and satisfaction” as “ ‘the substitution of a new agreement for and in satisfaction of a pre-existing agreement between the same parties.’ ” Accord and satisfaction is a defense founded in contract. The elements of an accord are the elements of a contract: proper subject matter, competent parties, consent, and consideration. The principles of law governing contracts are necessarily applicable to an accord. An agreement embodying the parties’ accord need not be express; an accord and satisfaction may be implied from the circumstances. The ordinary concept of an accord and satisfaction generally applies only when a cause of action has already accrued.9To prevail on the accord and satisfaction defense, the defendant must show (1) that there was a “bona fide dispute” between the parties, (2) that the debtor made it clear that acceptance of the debtor’s tender was subject to the condition that it was to be in full satisfaction of the creditor’s unliquidated claim, and (3) that the creditor clearly understood when accepting what was tendered that the debtor intended such remittance to constitute payment in full of the particular claim in issue.”
[California Affirmative Defenses [certain citations omitted]]
