What does 'accord and satisfaction' signify in legal terms?

'Accord and satisfaction' refers to a legal concept where two parties come to a mutual agreement to settle a dispute or claim by fulfilling a different obligation than originally agreed upon. This usually occurs when one party agrees to accept a different performance than what was originally owed, effectively resolving the issue at hand.

This concept is important because it demonstrates how parties can amend their contractual obligations and resolve disputes without resorting to litigation. By reaching an accord, they establish a new agreement that both parties accept, and through satisfaction, the new obligation is fulfilled, thus ending the original disagreement.

In contrast to this, the other options do not correctly reflect the definition of 'accord and satisfaction'. The acceptance of a contract offer involves the initial agreement to the terms of a contract, rather than a resolution of a dispute. A reduction of a legacy under a will pertains to estate law and the distribution of assets rather than contractual disputes. The legal right to settle an estate relates to the authority one has in managing the distribution of a deceased person’s assets and does not imply an agreement between parties to settle a dispute.