Question: what is accord and satisfaction in contractual terms

title: Accord and satisfaction
text: Accord and satisfaction is a settlement of an unliquidated debt . For example , a builder is contracted to build a homeowner a garage for $35,000 . The contract called for $17,500 prior to starting construction , to disburse $10,000 during various stages of construction , and to make a final payment of $7,500 at completion . At completion , the homeowner complained about inferior work quality and refused to make the final payment . After a mutual settlement agreement , the builder accepted $4,000 as full payment . Thereby , a new contract was formed by offer , acceptance , and consideration . The consideration is that for a $3,500 savings , the homeowner gives up that which he is entitled , a well - constructed garage . The builder gives up his right to full price to avoid suit for inferior performance . When accord and settlement has occurred , the homeowner and builder have given up his right to sue for more money under this settlement agreement . 

Answer: answer: Accord and satisfaction is a settlement of an unliquidated debt . When accord and settlement has occurred , both parties have given up the right to sue for more money under this settlement agreement .