Legal Question in Consumer Law in California

Re: paying a loan

What you have is an oral contract. First find out why the difference. You will have to pay the balance under protest and then sue in small claims court for this amount.

Re: paying a loan

Yes, you are likely required to pay the remaining amount to acquire your pink slip. Using the words "paid in full" or similar (known as accord and satisfaction) is successful only under limited circumstances. If the creditor either strikes out the words on the check, or can show that the check was cashed without knowledge of the notation (very likely in today's computer driven world where checks are automatically deposited) there will be no accord and satisfaction.

To ensure that a creditor has knowledge, you would be required to either have a prior written agreement from the creditor accepting the payment as payment in full or, 15 days prior to sending your payment, you would need to provide written notice of your intention to send a check constituting an accord and satisfaction. (See Civil Code Sec. 1526)

Before anyone gets any ideas however, there must also usually be a bona fide dispute over the amount due. In other words, you cannot simply make 1 or 2 payments on a purchase and then try to get the creditor to accept an accord and satisfaction on an undiputed debt.