UnknownA dispute concerning amounts owed (whether owed from an owner to contractor, a contractor to subcontractor, a subcontractor to supplier, etc.) is routine on a construction project.  Even in these disputes, the party responsible for owing  money may recognize there is an undisputed amount actually owed to the other party, although not the amount the other party claims.  While I am a believer in tendering undisputed funds, sometimes there are clever and strategic ways to tender that money.


For instance, the defense of accord and satisfaction is a defense that the party receiving the money deposited the money in full satisfaction of a disputed claim.  The decision in St. Croix Lane Trust & M.L. Shapiro, Trustee, v. St. Croix at Pelican Marsh Condominium Association, 2014 WL 3882458 (2d DCA 2014), while not a construction dispute, illustrates strategy in tendering money in full satisfaction of a claim and then relying on the defense of accord and satisfaction.  In this case, a condominium association foreclosed on a unit for unpaid assessments.  The unit was sold at a foreclosure sale to a Trust for $100.  The $100 was insufficient to pay the association the amount of its foreclosure judgment so the association sent a letter to the Trust advising that the Trust owed the association unpaid assessments that accrued on the unit prior to the foreclosure sale (in excess of $30,000).   The Trust disputed the amount it owed and thought it owed $840.  In this regard, the Trust sent a letter to the association (through counsel) stating, “[I]n a good faith effort to resolve this matter I have enclosed herewith a check in the amount of $840.00….Be advised and warned, this check is tendered in full and final satisfaction of all claims made against the Trust and the property….”  Despite this letter accompanying the check, the association negotiated the check and then threatened to foreclose a lien it recorded against the Trust’s unit due to the dispute.    The Trust filed a lawsuit seeking declaratory relief whether it owed the association any money. An argument it raised was accord and satisfaction since the association negotiated the $840 check clearly sent in full satisfaction of all claims.


On appeal, the Second District agreed with the Trust that accord and satisfaction applied to discharge the Trust of any more monies owed relating to the dispute.  The Second District relied on Florida Statute s. 673.3111 that provides:


“(1) If a person against whom a claim is asserted proves that that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, that the amount of the claim was unliquidated or subject to a bona fide dispute, and that the claimant obtained payment of the instrument, the following subsections apply.


(2) Unless subsection (3) 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.”


Furthermore, Florida case law defines an accord and satisfaction as follows:


 “An accord and satisfaction results as a matter of law when the creditor accepts payment tendered on the expressed condition that its receipt is deemed to be a complete satisfaction of a disputed issue. This court has long held that cashing a check containing language that it is in full payment of the debtor’s obligations creates an accord and satisfaction with regard to the claim for which payment was tendered.”

United Auto Ins. Co. v. Palm Chiropractic Center, Inc., 51 So.3d 506, 509 (Fla. 4th DCA 2010) (internal citation omitted)



If you are trying to devise clever strategy to set up an accord and satisfaction defense, you can send undisputed money with an accompanying letter clearly expressing that the money is in full and final satisfaction of the claim / dispute.  Or, clearly delineate this point on the check.  The recipient should not negotiate the check and should instead return it.  If the money is truly undisputed, the paying party can always re-tender that money to take that undisputed amount off the table without conditioning it as a full settlement of the claim. But, if the check is negotiated, as it was in this case, the party has just set up an accord and satisfaction defense!


Please contact David Adelstein at or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.


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