Satisfaction Of Settlement Agreement

However, exceptional circumstances may arise if the arbitral award is absent and the claimant may be entitled to sue another simultaneous case on the balance of his claim. Such a course was allowed in Kohnke v. Karger [1951] 2 K.B 670. This is a special case in that the first complaint was brought in France, where a defendant, a driver and his employers reside and where their property was located. The second complaint was brought in England, where the other defendant resided and where his property was believed to be. The judge was convinced that, in French practice, the assessment of damages would lead to an arbitral award lower than that considered fully satisfactory in England, and he rendered an arbitral award in the English case. But the case must be seen as dependent on its own rather unusual circumstances. The dissatisfied creditor may be able to reopen a transaction on the basis of an implied condition of performance or a tacit condition of redemption covering the possibility of a lack of performance; However, in the present case, the agreed amount has been paid and it is not necessary to rule on this point. Unlike payment or novation, an agreement and satisfaction are generally defined as an agreement to fulfill a debt or claim with a benefit other than the benefit originally due. Consistency and satisfaction are contractual and the common intention of the parties is therefore necessary. Therefore, a transaction constitutes an agreement and satisfaction of a claim only if both parties intend to do so.

In the absence of such an intention, a right to a certain amount of money cannot be satisfied by a partial payment. Where a payment lower than what is requested is offered and accepted, it does not constitute an agreement and satisfaction of the entire claim, unless it can be demonstrated that the creditor intends to accept it as total satisfaction. Another example would be that a lender agrees to lend $100,000 at 5.0% interest for 30 years and all loan documents are drawn up for a loan at an interest rate of 6.0% upon closing. If the lender agrees to reduce the closing costs by an additional $1000 and the borrowers agree, then there has been an agreement and satisfaction. . . .

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