Accord and Satisfaction of Tortious Liability
1. What is Tortious liability?
The word ‘tort’ or ‘tortious liability’ comes from the Latin word, ‘tortum’ meaning twisted. It implies to the act which is wrongful and crooked in the eyes of law. A tort may be defined as a civil wrong, apart from breach of contract and breach of trust, for which the appropriate remedy is unliquidated damages. The underlying principle of the tort law is that no one should be harmed by the act of others. The law believes that every individual has a duty of care towards everybody.
2. Discharge of torts
As we know, every tortious liability usually has a remedy. But, in the cases where there is no remedy present, a tort ceases to exist. This concept is termed as Discharge of torts. Discharge of torts can be defined as the process by which a tort is brought to an end, and the wrongdoer is not liable for the wrong committed by him. However, there are some reasonable grounds for the discharge of torts, which are-
1. Death of the parties
2. Waiver by election
5. Judgement Recovered
6. Statutes of Limitation
7. Accord and Satisfaction
- Death of parties– When there is the death of either of the parties, i.e. the plaintiff or the wrongdoer, then, the tortious liability is discharged. The legal heirs of the wrongdoer can compensate the plaintiff in certain cases.
- Waiver by-election– When a man, has more than one remedy for a tort, and he elects to pursue one of them while giving up the others, the other remedies are said to have been waived. Such waiver may be expressed or implied. The term “waiver by-election” however does not mean that the tort itself has been waived, it simply means that the right to recover damages for the tort committed has been waived.
- Release– A release can be termed as the process of giving up the right of action which a man has against the other. A release under mistake is not valid.
- Acquiescence– When a person, who knows that he is entitled to enforce a right, neglects to do so for a long time, the other party may say that the he has waived or abandoned his right. This is the concept of acquiescence. It is crucial here to note that, direct acquiescence takes away the right of action from a person.
- Judgement Recovered– This principle is based on the legal maxim, “Res Judicata”. This maxim implies that if the matter is decided conclusively and finally by the competent court then for the same cause of action, between the same parties the matter cannot be reagitated again and further or fresh suit is debarred.
- Statute of limitation– The India Limitation Act, 1963 prescribes a certain time Law will not take the case into account. This is the Statute of Limitation.
- Accord and satisfaction-
“An accord is an agreement between two or more persons, one of whom has the right of action against the other, that the latter shall render and the former accept some valuable consideration in substitution for the right of action. Therefore, we can say that accord is nothing but the agreement that the parties have settled upon and, satisfaction is nothing but the consideration or the amount the parties agreed to pay.
- When agreement is executed, and satisfaction has been made, the arrangement is called accord and satisfaction.
- This arrangement operates as a bar to the right of action.
- An accord and satisfaction, when in favour of the joint tort-feasors, is actually in favour of all of them, when the nature of the injury is such that it is indivisible.
- It is a good plea where the damages are to be recovered. For example, an action of libel.
- Accord, without satisfaction, does not bar the right of action.
- However, if what is accepted as satisfaction, is merely the promise and the performance thereof, the original cause of action is discharged from the date of promise.
- A civil action in tort and criminal proceedings for libel are distinct and different remedies. Therefore, any adjustment of the criminal complaint would not operate as an accord satisfaction of civil action for damages, unless it was agreed that the compromise in the criminal proceedings should also operate as an accord and satisfaction of civil action.
Relevant case laws:
- In National Insurance Company Limited vs. Boghara Polyfab Private Limited, it was held that “the discharge of contract by performance is referred to the fulfilment of the contractual obligations by performance, discharge through “accord and satisfaction” refers to the contract that is being discharged by the performance of certain substituted obligations. The agreement through which the original obligation is discharged is the accord, and the fulfilment of the substituted obligation is the satisfaction.”
- In S.C. Konda Reddy vs Union Of India And Anr, the concept of accord and satisfaction was rightly applied.
- In Payana Reena Saminathan vs.Pana Lana Palaniappa, the detailed definition of accord and satisfaction was given, as-
“… The ‘receipt’ given by the appellants and accepted by the respondents, and acted on by both the parties proves conclusively that all the parties agreed to a settlement of their existing disputes by the arrangement formulated in the ‘receipt’. It is a clear example of what used to be well known as 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 for a new agreement. The result is that when such an accord and satisfaction takes place, the prior rights of the parties are extinguished. They have in fact been exchanged for the new rights, and the new agreement becomes a new departure, and the rights of all parties are fully represented by it.”
Author: Vaishnavi Makne,
Symbiosis Law School, Nagpur