Opinion ID: 1125702
Heading Depth: 2
Heading Rank: 2

Heading: The intent.

Text: The determination of whether the compromise agreement is an executory accord or a substituted contract turns on the intent of the parties to it. As stated by Corbin, supra, § 1293, at 190: It is frequently difficult to determine whether a new agreement is a substituted contract operating as an immediate discharge, or is an accord executory, the performance of which it is agreed shall operate as a future discharge. It is wholly a question of intention to be determined by the usual processes of interpretation, implication or construction. (Footnotes omitted.) In the instant case, the record shows that counsel's letter of May 12 and the Johnsons' acceptance by their subsequent conduct constituted an executory accord. Admittedly, the language of the Deposit Receipt and Agreement of Sale and the escrow instructions lacks clarity. Because of the ambiguity in the written documents, the district judge heard and considered the oral testimony of the parties, and he concluded as a result thereof that their initial agreement included not only an operating well (Well No. 1), but also the drilling of Well No. 2. A fair reading of counsel's May 12 letter supports the court's conclusion that the letter referred to an antecedent obligation, where the proposed compromise stated that the Utiles agreed to relinquish their claim to operating Well No. 1,  provided that the equipment [on Well No. 1] is in satisfactory operating condition, and, further, assuming that the new well [Well No. 2] has been tested and is capable of producing the amount of gallonage set out in the agreements    (Emphasis added.) Such language supports the district judge's decision, in that the Utiles agreed to relinquish their right to Well No. 1 only after Well No. 2 had been drilled and had produced and operated satisfactorily.