Raphael, who owes $10,000 to his credit card company, sends a check to the credit card company for $50 and marks the check "paid in full." The credit card company inadvertently cashes the check, but the mistake is caught two weeks later and they offer to repay Raphael his $50. Raphael does not respond. Does accord and satisfaction exist?
A) Yes, because the bank cashed the check and this is sufficient for accord and satisfaction.
B) Yes, because Raphael did not accept the bank's offer for repayment.
C) Yes, because the bank has to offer a refund to Raphael within one week to avoid accord and satisfaction.
D) No, because the $50 payment accounted for less than 10 percent of the balance due.
E) No, because the bank offered to repay the money in a timely manner.

Question

Quizplus · Accepted Answer

Accord and satisfaction require an agreement between the debtor and creditor where the creditor accepts a lesser amount as full payment. The key here is the creditor's acceptance of the lesser amount as full and final payment of the debt. In this case, the bank's action of offering to repay the $50 indicates that they did not accept the $50 as full payment of the debt. The timely offer to repay negates the possibility of accord and satisfaction because it demonstrates the bank's intention not to accept the $50 as full settlement of the $10,000 debt.

Raphael, Who Owes $10,000 to His Credit Card Company, Sends