What does 'accord and satisfaction' refer to?

'Accord and satisfaction' is a legal concept that specifically refers to resolving a disputed obligation by agreeing to accept a different performance than originally agreed upon in the contract. Essentially, it involves one party agreeing to accept a new proposal that is different from what was originally stipulated, and the other party fulfills that new agreement, thereby settling the dispute.

This concept is foundational in contract law, particularly when one party feels that the other party has failed to fulfill their contractual responsibilities adequately and seeks to alter the terms of the obligation to find a resolution. The 'accord' is the new agreement, while 'satisfaction' refers to the performance or execution of that new agreement. Thus, when one party performs according to the new terms, the original obligation is considered discharged.

The other options, while relevant in various contexts, do not correlate with the precise legal definition of 'accord and satisfaction.' For example, arbitration involves resolving disputes through a third party and is not necessarily connected to altering the terms of a contract. Mutual dissolution pertains to both parties agreeing to end a contract rather than amending its terms. Compensation for damages relates to a remedy provided after a breach, which does not signify a change in the original performance obligations.