Legal Question in Business Law in California
Payee sends payor a demand letter for payment of total amount due. Payor sends a check of less than 50% of amount due and writes on check, when deposited amount is paid in full. Payee deposits check & disagrees that is not paid in full ...can payee sue payor in small claims court for the difference, since payee sent a demand letter for the full amount & payor paid less than the full amount?
2 Answers from Attorneys
Unless the parties were in complete agreement about the amount owed before the check was issued and cashed, the Payee has made a mistake. He should have crossed out the words "when deposited amount is paid in full." There has been an accord and satisfaction. See Civil Code section 1526 for a full discussion.
Most attorneys will tell you, by signing and depositing the check, Payee has agreed to an accord and satisfaction (that when the check is deposited the amount due is paid in full). So, if this hasn't happened yet, don't sign and deposit the check. Consult with an attorney in your area.
Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise
Franchise Attorney
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