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Is cashing a check for insurance restoration work an agreement for payment complete on the project.

VirginiaCollectionsPrompt PaymentRecovery Options

Some customers make payment via insurance checks and personal checks for partial amount of payment. If I cash these checks, am I waiving my lien rights or waiving the rest of payment owed to me? Can I cash these checks to utilize for cash flow and still pursue the rest of payment.

2 replies

May 20, 2021

The answer to this is "it depends." If you have billed for the work and have performed the work then you can deposit it, pay your subs and suppliers, and move forward. It does not matter where the check came from. One caveat is that if the balance due is disputed (for instance you finish and they try and short pay you), and they put something like "Full and Final Payment" on the memo line, cashing the check will be considered "Accord and Satisfaction" and will later be considered by the Virginia courts as a full and final payment of a disputed debt.

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May 21, 2021

Thank you Christopher!

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