Glossary

Accord and satisfaction. A settlement of an existing claim under which the parties agree that one of them (the debtor) will give, and the other (the creditor) will accept a lesser performance than that originally claimed by the creditor. The agreement of settlement is the accord, and its execution by rendition of the settled performance is the satisfaction. Until the settlement is satisfied by performance, it is known as an executory accord.

Actions of Assumpsit, Covenant, and Debt. See Assumpsit; Covenant; Debt.

Adhesion. A contract is adhesive where the party who drafts the terms of the contract has the market power to insist that the contract may be only on its terms, and the other party has no choice but to agree to the terms if he wishes to enter the contract. That is, the terms are nonnegotiable and the nondrafting party has no choice but to adhere to them if he wants the contract.

Agreed damages. See Liquidated damages.

Agreement to agree. Negotiating parties may have reached agreement in principle, but may not have settled all the terms of their proposed contract. They may decide to postpone resolution of those terms for later, agreeing to address them at a future date. This situation is sometimes described as an “agreement to agree.” If the unresolved terms are material, no contract can come into existence until they are settled, so an “agreement to agree” is not a contract. However, the parties may have promised expressly or impliedly to continue to negotiate in good faith.

Anticipatory repudiation. A contract cannot be breached before the time of performance falls due. However, if, before his performance is due, a party makes it clear by unequivocal words or unambiguous voluntary conduct that he will not perform as promised, or will materially breach the contract when the time for performance arrives, he repudiates in anticipation of performance. The other party may react to this repudiation immediately and pursue relief for breach. See also Prospective nonperformance.