Ark. Code Ann. § 4-3-311 (2020)
Accord and satisfaction by use of instrument
- If a person against whom a claim is asserted proves that (i) that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, (ii) the amount of the claim was unliquidated or subject to a bona fide dispute, and (iii) the claimant obtained payment of the instrument, the following subsections apply.
- Unless subsection (c) applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.
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Subject to subsection (d), a claim is not discharged under subsection (b) if either of the following applies:
- The claimant, if an organization, proves that (i) within a reasonable time before the tender, the claimant sent a conspicuous statement to the person against whom the claim is asserted that communications concerning disputed debts, including an instrument tendered as full satisfaction of a debt, are to be sent to a designated person, office, or place, and (ii) the instrument or accompanying communication was not received by that designated person, office, or place.
- The claimant, whether or not an organization, proves that within ninety (90) days after payment of the instrument, the claimant tendered repayment of the amount of the instrument to the person against whom the claim is asserted. This subdivision does not apply if the claimant is an organization that sent a statement complying with (c)(1)(i).
- A claim is discharged if the person against whom the claim is asserted proves that within a reasonable time before collection of the instrument was initiated, the claimant, or an agent of the claimant having direct responsibility with respect to the disputed obligation, knew that the instrument was tendered in full satisfaction of the claim.
History. Acts 1991, No. 572, § 5.
Research References
U. Ark. Little Rock L.J.
Survey—Business Law, 14 U. Ark. Little Rock L.J. 735.
Case Notes
Acceptance of Payment.
Generally, acceptance by a creditor of a check offered by the debtor in full payment of a disputed claim is an accord and satisfaction of the claim; a payee is estopped to deny an account has been paid in full where, after a dispute as to the amount due, a payee accepts and cashes a check that recites that it is in settlement of the account. Hardison v. Jackson, 45 Ark. App. 49, 871 S.W.2d 410 (1994).
Where the uncontroverted evidence plainly showed that defendants disputed the amount they owed plaintiff when plaintiff accepted defendants' check, the defendants proved their defense of accord and satisfaction and the chancellor's award of damages and attorney's fees in favor of plaintiff was clearly erroneous. Hardison v. Jackson, 45 Ark. App. 49, 871 S.W.2d 410 (1994).
In an action for breach of contract, the circuit court abused its discretion when it set aside its previous order granting appellant attorney's fees because an accord and satisfaction under this section did not take place when appellant cashed appellee's check; the note on the check did not say anything about attorney's fees — it simply stated that it was payment in full of the judgment. Therefore, appellee's check satisfied only the liquidated judgment and did not affect the collateral attorney's fee issue. Rouse v. Myers, 2013 Ark. App. 313 (2013).
Cited: Landreth v. First Nat'l Bank, 45 F.3d 267 (8th Cir. 1995).