This article is written by Komal Kumari, a 4th year student of BA.LLB in Lloyd Law College, Greater Noida. The article focuses on the aspects of Accord and Satisfaction as well as the various related aspects of discharge of torts under the law of torts.
What is the law of tort?
The term ‘tort’ has its origin from the Latin term ‘torture’ which means to twist or the conduct which is twisted or tortious. The basic principle underlying tort law is that there is a duty of care towards everybody, which is implied under the law, and no one should be harmed by the actions of others.
As per the common law jurisdictions, a tort is a civil wrong that unjustifiably causes someone else to suffer loss, harm or injuries resulting in the legal liability for the individual who committed the tortious act, known as the tortfeasor. Even though crimes can be torts, but the reasons for legal action is not inevitably a crime, as the reason for harm may be due to negligence which does not lead to criminal negligence. The legal injuries are not limited to the physical injuries but also includes economic, emotional, reputational injuries as well as violations of privacy, property or constitutional rights.
Discharge of Torts
Discharge of tort is a term used for referring to the circumstances where the liability exists but remedy does not. The literal meaning of discharge of tort is coming to an end of tort. It is a process where a wrongdoer is not liable for the wrongs committed by him though the tort cease to exist. Following are the seven modes for the discharge of tort:
Waiver by election
When a man has more than one remedy for a tort, and he elects to pursue one of them, giving up the others, the other remedies are said to have been waived off. He cannot pursue them if he fails in the one elected. Such waiver may be express or implied: It is in express, when the person entitled to anything expressly gives it up, in which case it nearly resembles release; it is implied, when the person entitled to anything, does or acquiesces in something e which is inconsistent with that to which he is so entitled. The phrase “waive the tort” does not mean that the act of tort itself is waived rather it is only the right to recover damages for the tort committed, that is waived.
Death of the parties
‘Action personalis moritur cum persona’ is the common law maxim that applies here, which means the personal right of action dies with the person. There is a possibility of two situations in case of death of parties:
1) Death of wronged person, i.e., against whom the tort is committed.
2) Death of wrongdoer, i.e., who has committed a tort.
If there has been the death of the wronged person, the legal heirs can claim damages from the defendant for the proprietary wrong, i.e., if the tort was committed against property, in the case of nuisance, trespass, negligence, fraud, waste, etc. But if there has been a case regarding personal tort, then the defendant cannot be sued which means that even in case of death of wrongdoer the legal heir of the deceased is not liable for the personal tort of the wrongdoer.
Personal torts are referred to those torts which are affecting the mind and body of the person, i.e., assault, battery, false imprisonment, defamation etc.
Accord and Satisfaction
Accord refers to an agreement whereby a person agrees to accept some valuable consideration in lieu of the right of action that he has against the other. Satisfaction means actual payment of an amount of consideration so agreed to when there is an agreement, and it is satisfied by its executors, the agreement is termed as an accord and satisfaction, and it discharged the tort.
A release is meant as the giving up or discharging of the right of action which a person has or may have against another man. But a release executed under a mistake or in ignorance of one’s rights, or obtained by fraud, is not valid.
A covenant not to sue at all is equivalent to a release and may be pleaded in bar. A mere covenant not to sue one of two joint tortfeasors does not operate as a release so as to discharge the other.
In cases where a person who is aware that he is entitled to enforce a right, neglects to do so for a period of time, the other party may fairly infer that he was waived or abandoned his right. But to deprive a man of his legal remedies, there must be something more than mere delay.
Direct acquiescence takes away the right of action.
The cause of action against a wrongdoer in respect of wrong is extinguished by a judgement obtained in a court of law. The judgement is a bar to the original cause of action, because it is thereby reduced to a certainty, and the object of the suit attained, so far as it can be at that stage; and it would be useless and vexatious to subject the defendant to another suit for the purpose of obtaining the same result. The person injured cannot bring a second action for the same wrong even though it is subsequently found that the damage is much greater than was anticipated when the action was brought. If in an assault a person sustains a broken arm and a broken leg, he must sue for both the injuries in the same action.
Statutes of Limitation
There is a difference between wrongs which are actionable per se, and others which are actionable only where the plaintiff can prove that he has suffered actual damage. The period of limitation runs, in the first case, from the time of the plaintiff’s first sustaining actual injury.
In England, the Limitations Act, 1980 fixes the time during which actions of tort must be brought. However, Section 14A of the Limitation Act, 1980 will not apply to claims for negative declaratory relief as to the absence of liability in torts.
Accord and Satisfaction
The term “accord and satisfaction” is used for referring “the legal consequence of a petitioner’s acceptance of a substitute performance for a previously existing claim or prior obligation or duty.” As the name implies, accord and satisfaction consist of two distinct parts. The “accord” of an accord and satisfaction is an agreement in which the creditor promises to accept the substitute performance for the pre-existing claim or duty. The “satisfaction” is the actual acceptance by the creditor of that substitute performance. These terms are used together to represent the legal consequence of accepting performance of the accord as satisfaction, the legal consequence being the discharge of the prior claim or duty. There are three prior essentials required for a valid discharge of an existing claim or duty by accord and satisfaction:
- Existence of a claim or duty,
- Offer and acceptance of a substitute performance in full settlement, and
- Proper consideration.
Under the Law of Tort
When the agreement is executed, and satisfaction has been made, the arrangement is called accord and satisfaction and operates as a bar to the right of action. An accord and satisfaction in favour of one joint tort-feasor operate in favour of them all when the injury is one and indivisible. It can then give rise to but one cause of action, and consequently, if satisfaction is accepted as full and complete as against one person, it operates with respect to the entire cause of action.
Where only damages are to be recovered, accord and satisfaction is a good plea, i.e., action for personal injuries, actions for libel. But when a person has agreed to accept a sum for personal injuries, and subsequent damage not within the contemplation of parties, when the agreement was made, arises, the original accord and satisfaction will not prevent him for bringing an action for further injury.
Accord without satisfaction does not bar the right of action. But if what is accepted in satisfaction is merely the promise and not the performance thereof, the cause of action is discharged from the date of the promise. It is a matter of construction, whether what was accepted in satisfaction was the promise or its performance.
Analyzing Accord and Satisfaction
In order to analyze accord and satisfaction, the first step is to determine the following question:
- Whether the obligation is liquidated or unliquidated.
- Whether it is disputed or undisputed.
Liquidated or Unliquidated
Liquidated refers to the precise amount which has been decided by the parties or determined by the litigation or through the legal process – For instance, an agreement between an attorney and his client that the attorney will perform services for a fee of Rs.10,000, then it results in a liquidated obligation, where the amount has already been determined.
Unliquidated refers to a situation where there has been an agreement that the attorney will give the bill to the client according to the reasonable value of his services and renders a bill of Rs.10,000, this results in unliquidated obligation, where it has not been decided priorly.
Disputed or Undisputed
Whether an obligation is disputed or not is decided by the defence raised in good faith.
Having classified the obligations, the next step is to determine
(1) whether it is both liquidated and undisputed, or
(2) whether it is either unliquidated or disputed.
Through this, the parties can conclude an agreement to accept partial performance in full satisfaction of an unliquidated or disputed obligation, which is a form of contract called an accord. The agreement hovers until it has been fully performed and its full performance is known as satisfaction.
Under Contract Law
An overall analysis of the judicial decisions indicates that the principle of Accord and Satisfaction have been more applicable in the field of Contractual Law than in Tort Law. There is another interesting application of this principle to the Arbitration trials. In Russell on Arbitration, it is stated that an accord and satisfaction may be pleaded in action on the award and will constitute a good defence.
There are a no. of cases in the Indian courts related to the principle of “accord and satisfaction”:
- Payana Reena Saminathan v. Pana Lana Palaniappa (reiterated in Union of India v Kishorilal Gupta and Bros, AIR 1959 SC 1362): This case gave the classic definition of the term “accord and satisfaction” as mentioned herein –
“… 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.”
- National Insurance Company Limited v. Boghara Polyfab Private Limited : In this case it has been mentioned 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.
- Union of India v. M/s Ajit Mehta and Associates, Pune and Others, AIR 1990 bom 45
- P.K. Ramaiah and Company v. Chairman & Managing Director, National Thermal Power Corporation, 1994(1) SCALE 1
- S.C. Konda Reddy v. Union of India and Anr, AIR 1982 Kant 50
Accord and satisfaction can be referred to as the principle that attempts to find a middle ground between the interests of the wronged party and the wrongdoer. It is reasoning which is in human nature since time immemorial. In regards to the huge no. of pending cases in the Indian courts, there is an important need for the alternative remedies or methods of resolution, and hence this doctrine proves to be a very effective tool in solving the crisis. Even though it has a wide scope, its efficacy in the field Tort Law is the responsibility of the legal system to determine and lay emphasis on.
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