Frequently Asked Questions

How can acceptance of a check with the notation "payment in full" be construed in cases of accord and satisfaction?

In the context of accord and satisfaction agreements, the acceptance of a check with the notation "payment in full" can be interpreted as an acceptance of a new agreement. This is particularly relevant in cases where there is a dispute over the original amount of debt. According to the Uniform Commercial Code (UCC), the acceptance of such a payment, accompanied by a conspicuous statement that the amount given will lead to full satisfaction of the original debt, can be seen as an agreement to the accord and satisfaction. However, this interpretation is not absolute. For instance, if the creditor can prove that he was unaware of the "payment in full" notation when cashing the check, or if he deleted or struck out the notation, his acceptance of the check may not be construed as an accord and satisfaction agreement. A case in point is the H.L. “Brownie” Choate, Inc. V. Southland Drilling Co., Inc case, where the court ruled that the acceptance and cashing of a check offered in “full settlement” constituted an accord and satisfaction of the debt.