Opinion ID: 600262
Heading Depth: 2
Heading Rank: 3

Heading: What's in a Name?

Text: 16 The parties have expended considerable effort debating whether the November 1 letter agreement should be evaluated as an accord and satisfaction or as a novation. We deem it unnecessary to venture into this Serbonian bog. 17 The Rhode Island Supreme Court has traditionally manifested a concern with substance rather than form in this fuliginous corner of the law, hesitating to draw fine lines between these two closely allied kinds of contracts where no necessity exists for doing so. See, e.g., Mello v. Coy Real Estate Co., 103 R.I. 74, 234 A.2d 667, 671-72 (1967) (noting that dissimilarities between the two theories are frequently of no concern, as both operate to discharge all the rights and obligations emanating from a prior agreement); Salo Landscape & Constr. Co. v. Liberty Elec. Co., 119 R.I. 269, 376 A.2d 1379, 1382 (1977) (holding that, when the parties' subsequent agreement created new contractual rights and obligations which extinguished those arising under the original contract, it matters not whether a court refers to the subsequent agreement as an accord and satisfaction or as a rescission followed by the formation of a new contract); see also Masse v. Masse, 112 R.I. 599, 313 A.2d 642, 645 (1974) (stating that either a release or an accord and satisfaction of an alimony judgment will bind the parties if fully complied with and supported by sufficient consideration). Federal courts, construing state law, have often exhibited the same disinclination. For example, the Seventh Circuit, confronted with an analogous fact pattern, chose practicality over pettifoggery. See Calder v. Camp Grove State Bank, 892 F.2d 629, 633 (7th Cir.1990) (concluding that a difference in the characterization of the [agreement] does not affect the outcome of this case, since, under Illinois law releases, novations, and accords and satisfactions are all contracts subject to the requirement of mutual intent and the constraints of the parol evidence rule). 18 The lesson to be learned from all of this is that, when it would serve no useful purpose to distinguish between accord and satisfaction, on the one hand, and novation, on the other hand, courts should refrain from performing what will amount to no more than an exercise in semantics. So it is here. If the November 1 agreement constitutes a valid contract, it binds the parties in substantially the same manner whether we call it an accord and satisfaction or a novation, operating to discharge all the rights and obligations emanating from the preexisting oral agreement.