Under the doctrine of accord and satisfaction, a party may discharge a contractual obligation by rendering different performance, such as by tendering a negotiable instrument, if which conditions are met?

• A. The obligation is liquidated and not in dispute; the instrument is tendered with a conspicuous statement that it is full satisfaction; the instrument is paid to the obligee.
• B. The obligation is unliquidated or in dispute; the instrument is tendered with a conspicuous statement that it is full satisfaction; the obligee actually receives payment.
• C. The obligation is unliquidated or in dispute; the instrument is tendered without any statement; the obligee accepts the instrument.
• D. The obligation is fully paid in cash; the instrument must be a promissory note.

Answer: (B)

Accord and satisfaction lets a party discharge a debt by offering a substitute performance when the amount due is not settled or is disputed, and the substitute is accepted as full settlement. For this to work with a negotiable instrument, three things must happen: the obligation must be unliquidated or in dispute; the instrument must be tendered with a conspicuous statement that it is offered in full satisfaction of the debt; and the obligee must actually receive and accept the instrument as payment. This combination makes the substitute performance effective as full satisfaction of the original obligation. The other options fail because they either involve a liquidated debt, omit the required explicit full-satisfaction language, or impose conditions (like cash) that aren’t part of the accord and satisfaction framework.