Karu contract PDF

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Chapter 1 1.1 INTRODUCTION: The theory of ‘accord and satisfaction’ is provided under the section 63 of Indian Contract Act , 1872. Accepting some other satisfaction instead of actual performance is known as principle of ‘Accord and Satisfaction’ under English law. It has been defined as the ”purchase of a release from an obligation, whether arising from the contract or tort by means of any valuable consideration but being the actual performance of the obligation itself. The accord is the agreement by which the obligation is discharged. The satisfaction which makes the agreement operative”. The liability arising out of the breach of contract may be discharged by accord and satisfaction. By the virtue of this project, I seek to understand the applicability of the accord and satisfaction principle in the extinguishment of liability, contrast to its popularity in contractual law and review cases in which the said principle is called upon.

1.2 Research Questions The main questions that I shall endeavor to answer by means of my research are: 1. What are the parameters of Accord and Satisfaction? 2. What are the circumstances which arise in case of a breach of Accord? 3. Which laws may govern the nature of Accords in the Indian context?

1.3 Methodology This research project shall have a doctrinal approach, by virtue of its analysis of literature.

1.4 Scheme of Chapterization The scheme of chapterization of the research project is as follows. It begins with an introduction to the research topic, which Accord and Satisfaction. It progresses to the next chapter, which deals with the same principle in greater depth. The third chapter deals with the cases that have taken place in the courts. Finally, the concluding chapter offers the remarks observed by the researcher and seeks to crystallize the research project for the reader

Chapter 2 2.1 Laws which govern the nature of Accords in the Indian context Section 63 : promisee may dispense with or remit performance of promise. Every promise may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance or may accept instead of it any satisfaction which he thinks deep. Illustrations A promises to paint picture for B. B afterwards forbids him to do so. A is no longer bound to perform the promise.

2.2 Principle of Accord and Satisfaction The accord is an agreement made after breach whereby some consideration other than his legal remedy is to be accepted by the party not in fault, followed by performance of the substituted consideration. The liability arising out of breach of contract may be discharged by accord and satisfaction. The validity of accord and satisfaction must be judged by general law of contract quite apart from the provisions of section 62 and 63. The principle and effect of accord and satisfaction were thus explained in a decision of the privy council. The receipt given by the appellants and accepted by the respondents are acted upon by both proves conclusively that all the parties agreed to a settlement of all their existing disputes by the arrangement formulated in the receipt. It is a clear example of what used to be well known in the common law pleading as accord and satisfaction by a substituted agreement. No matter what were the respective rights of the parties inter se, they are abandoned in consideration of the acceptance by all of a new agreement. The consequence is that when such an accord and satisfaction takes place the prior rights of the parties are extinguished. They have, in fact, been extinguished by the new rights, and the new agreement becomes a new departure and the rights of all the parties are fully represented by it. A contracting party in respect of his obligation towards another is released from such obligation if there is an accord and satisfaction between the two parties. In P.K. Ramaiah & Co v NTPC the Supreme Court held that in view of the full and final settlement of the claim, there was an accord and satisfaction and there was no existing arbitrable dispute. Where a claim for damages was settled by the railway by sending a cheque in full and final payment and which was to be returned if not acceptable, but the claimant encashed the cheque in protest stating that objections

to encashment may be communicated within 10 days, it was held that because there was no reply from railway, there was no mutually agreed accord and satisfaction.1

Chapter 3 3.1 Cases: Kapurchand Godha v Mir nawab himayatalikhan Azamjah. Plaintiff after some initial protest expressed readiness to accept the sum sent to in full satisfaction of his claim and discharge the promissory note making endorsement of full satisfaction and received the payment. In these circumstances it was held that the case was completely covered by Section 63 of the Indian Contract Act, 1872. Snow View Properties Ltd v Punjab & Sind Bank. The bank launched recovery proceedings against the borrower but compromised it if the borrower paid a certain sum of money. The borrower accepted it and paid the amount. The claim of the bank ended by accord and satisfaction. The bank was required by the court to return to the borrower his mortgage and hypothecation documents.

Chapter 4 4.1 Conclusion: Accord and Satisfaction is thus a principle that seeks to find the middle ground between the interests of the wronged party and the wrongdoer. It is a rationale that is prominent in the human condition and as such has been used since time immemorial. In status quo, stressing upon the backlog of cases that plague the Indian courts and the need for alternate methods of resolution, it is the researcher’s opinion that the doctrine could prove to be a very effective tool in resolving the crisis. There is wide scope for the subject in the global arena yet the need to highlight its efficacy in the field of torts is a burden that the legal system must take upon its self. Accord and Satisfaction provide an avenue of collaborative balance of interests, thus easing the burden on the parties by view of a subjective interpretation of the same. However, the boon is also a bane, since an unwitting individual may very well waive his rights for inadequate compensation and may be exploited. 1

Chapter 5 5.1 Bibliography: 1 contract & Special Relief by Avtar Singh 2 accord and satisfaction by Dr. Ashok k. jain...