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  1. #1
    Join Date
    Oct 2007
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    Default Is Writing Paid-In-Full on a Check Binding?

    My question involves a consumer law issue in the State of: Michigan

    If "paid in full" or "void after" is written on a personal check and the person it is written to signs it, is it legally binding?

    i wish to pay only $2,000 in a disputed $4,000 retail bill AND don't want to wait 6 months to find out if they are going to cash it or not. Thanks!

  2. #2
    Join Date
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    Default Re: CHECKS Paid-In-Full Binding?

    If "paid in full" or "void after" is written on a personal check and the person it is written to signs it, is it legally binding?
    Generally, no.

    This varies by bank, but most banks have a clause in their Terms and Conditions stating that you can write whatever you want on your check in an attempt to restrict cashing it, but they're not going to pay it any mind and are going to cash it anyway.
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  3. #3
    Join Date
    Mar 2007
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    9,085

    Default Re: Is Writing Paid-In-Full on a Check Binding?

    Quote Quoting speedlabel
    View Post
    My question involves a consumer law issue in the State of: Michigan

    If "paid in full" or "void after" is written on a personal check and the person it is written to signs it, is it legally binding?

    i wish to pay only $2,000 in a disputed $4,000 retail bill AND don't want to wait 6 months to find out if they are going to cash it or not. Thanks!
    No, you cannot make cashing a check a contract.

  4. #4

    Default Re: Is Writing Paid-In-Full on a Check Binding?

    What you can do is to send it to them as an offer in settlement and write "full satisfaction and accord" on the check. In your letter along with the check state that it is a offer of settlement and if they do not agree to return the check. Send it CRRR.

  5. #5
    Join Date
    Jan 2006
    Posts
    27,034

    Default Re: Is Writing Paid-In-Full on a Check Binding?

    here is a good article on "accord and satisfaction"

    http://www.allbusiness.com/finance/686973-1.html

    in brief, it states that unless there is a valid dispute to the actual amount owed, writing a restrictive endorsement on a check is not binding.

    the amount tendered is simply applied to the debt owed with the restictive endorsement being meaningless.

    If the disputed amount is an honest dispute and not merely some figure you decided was proper, then the accord and stisfaction may be binding BUT if the creditor disagrees with the validity of your dispute, it will not prevent them from suing for the balance. If they decide to act as such, you will have to defend yourself in court and the judge will decide if it is binding or not.

  6. #6
    Join Date
    Mar 2005
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    Michigan
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    28,626

    Default Re: Is Writing Paid-In-Full on a Check Binding?

    Quote Quoting lwpat
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    Send it CRRR.
    I don't see the point in that. Proving that they received something in the mail from you has no relevance to the dispute over the bill, nor does it make it any more likely that they'll accept the check as satisfaction of the debt. A first class stamp is a lot cheaper.

  7. #7

    Default Re: Is Writing Paid-In-Full on a Check Binding?

    Many places simply open the mail and automatically deposit the check. If it is a lockbox operation, they may even discard the letter. Sending it CRRR proves that someone actually received and was responsible for reading the letter and therefore accepted the terms of the settlement offer prior to depositing the check.

  8. #8
    Join Date
    Jul 2008
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    853

    Default Re: Is Writing Paid-In-Full on a Check Binding?

    That does not matter. There are states that allow restrictive endorsement, but it is under strict regulation. There are no states that I am aware of that allow RE in the manner you describe.

    Think about it, if it were that easy, I could simply write "Paid in Full" on my first mortgage payment, and get a $300,000 home for $1,500.

  9. #9
    Join Date
    Jan 2006
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    27,034

    Default Re: Is Writing Paid-In-Full on a Check Binding?

    Quote Quoting divemedic
    View Post
    That does not matter. There are states that allow restrictive endorsement, but it is under strict regulation. There are no states that I am aware of that allow RE in the manner you describe.

    Think about it, if it were that easy, I could simply write "Paid in Full" on my first mortgage payment, and get a $300,000 home for $1,500.
    BUT do you have a valid dispute concerning the amount owed?

    If so, then in some circumstances, accord and satisfaction is binding. OP does state there is a dispute. OP does not state if the $2k is what he believes the actual amount due to be so can;t make the call as to it being binding or not but it may be.

  10. #10
    Join Date
    Mar 2005
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    Michigan
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    Default Re: Is Writing Paid-In-Full on a Check Binding?

    Quote Quoting lwpat
    View Post
    Sending it CRRR proves that someone actually received and was responsible for reading the letter and therefore accepted the terms of the settlement offer prior to depositing the check.
    No, that simply proves that an envelope was received, containing something. Which is also proved by the deposit of a check sent by mail.
    Quote Quoting divemedic
    View Post
    Think about it, if it were that easy, I could simply write "Paid in Full" on my first mortgage payment, and get a $300,000 home for $1,500.
    This was mentioned earlier. Odds are your contracts with your mortgage lender, credit card companies, and other institutional lenders all specify that they can cash checks marked "paid in full" (or with similar statements) without any prejudice to their ability to collect the full balance owed. Also, as a couple of other posts indicate, for "accord and satisfaction" there must be a dispute as to the amount owed, which is not ordinarily the case with a mortgage payment.

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