CA-Is "Payment in Full" notation on partial payment check binding.

Bankruptcy and Debt 3 views 2 answers
Client issued a check for partial balance on invoice and wrote "paid in full" on check. This was not agreed. Is this notation binding on me if I cash it and want to go to small claims court for judgment on remaining balance? Can I note on reverse when I cash it - "payment in full not agreed" or balance due $___" This is in California.

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Moderator ·
Thanks for using . I am an Staff Moderator. To read more about our moderation team, follow the link below. Our current question volume may increase the response times of our loyal lawyer-answerers. My goal is to give you some preliminary information and guidance regarding your legal situation while you wait for an attorney in your area to respond. http://www.attorneyqna.com/attorneys/98101-wa-avvo-moderator-1769851/aboutme.html Check CA Civil Code Section 1526 and Commercial Code 3311 for exceptions, but in mosts cases you can simply cross out the "paid in full" and deposit it, particularly where the amount is not in dispute. You should also send a letter or email to the client at the same time telling them you are cashing it but don't consider it payment in full.
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Pamela KoslynBusiness AttorneyLos Angeles, CA ·
No, you cannot cross out the "paid in full" restrictive endorsement on a check you receive, cash the check, and reserve your rights to go after more money. Once you cash the check with that "offer," your acceptance of the check is an acceptance of the offer. The controlling California statute on the issue of the legal validity of an "accord and satisfaction" is Commercial Code § 3311. The Official Comment no. 2 to Uniform Commercial Code § 3311 reads: "This [acceptance of compromise by cashing a check] result is the same if [the creditor] adds a notation to the check indicating that the check is accepted under protest or in only partial satisfaction of the claim. Under the common law rule [the creditor] can refuse the check or can accept it subject to the condition stated [ ], but [the creditor] can't accept the check and refuse to be bound by the condition. Id., (emphasis added)." Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.
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