If you write the word Final in a memo box is it binding
1 reply
Dec 18, 2019
For a claimant who receives a check that indicates it's "Final" or "Final Payment," it's typically a bad idea to cash the check if it doesn't, in fact, represent the final payment for the project. By accepting a check which is clearly identified as final payment, that act of cashing the check may well serve as acceptance of the finality of the check and prohibit attempts to later collect unpaid amounts.
The law firm of Berry Moorman actually has a great article on a Michigan Supreme Court case on their website: Small Businesses Beware: Accord and Satisfaction May Offer An Escape Hatch for Debtors And Leave You Unsatisfied.
In that case, a contractor billed their customer, the homeowners, $16,000. The owners felt they'd already overpaid the contractor and gave a final check which read "FINAL PAYMENT". And, because there was a clear and conspicuous indication that the check was for final payment, and because the contractor cashed the check anyway, the contractor effectively waived its right to further payment.