§ 4-3-311 — Accord and satisfaction by use of instrument

(a) 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.

(b) Unless subsection (c) of this section 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.

(c) Subject to subsection (d) of this section, a claim is not discharged under
subsection (b) of this section if either of the following applies:

(1) 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.

(2) The claimant, whether or not an organization, proves that within ninety
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
paragraph (2) does not apply if the claimant is an organization that sent a statement
complying with paragraph (1)(i) of this subsection (c).

(d) 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.

Legislative History

Source: L. 94: Entire article R&RE, p. 859, � 1, effective January 1, 1995.