If paid in full was written on a cashed check, does that release debtor of debt?
Full Question:
Answer:
An accord and satisfaction is a method of discharging a contract, or settling a cause of action arising either from a contract or a civil wrong (tort), by substituting for the contract or cause of action an agreement for its satisfaction and the performance of the substituted agreement. The accord is the agreement; the satisfaction is the performance of the agreement.
To create an accord there must be a substitute offer in full satisfaction of an existing claim, accompanied by a declaration amounting to a condition that if the offer is accepted it will be in full satisfaction of the original claim.
For a valid accord and satisfaction between two parties, a mutual assent or agreement or a meeting of the minds is required. In other words, the thing agreed to be given or done in satisfaction must be offered and intended by the debtor as full satisfaction, and accepted as such by the creditor. Where there is no agreement to settle all matters in dispute, no accord and satisfaction result.
Retention of a check offered as payment in full has been sometimes been held to constitute assent to an accord and satisfaction. As a general rule, where a creditor receives a check purporting to be in full payment of a debtor's disputed obligation, the creditor should return it promptly in order to avoid an accord and satisfaction or a presumption that the creditor's retention of the check is in satisfaction on the underlying obligation.
Cashing the check is further evidence of an accord and satisfaction.
