Legal Question in Credit and Debt Law in Michigan

Paid In Full on checks

I heard from a very reputable source that there is a law in the state of MI (maybe elsewhere?) that states that if you write PAID IN FULL in the memo area of a check you write to a vendor, including your acct. number, and they CASH IT, that you are no longer liable for the remainder of your bill. In particular, if you dispute charges on your account, and they cash the PAID IN FULL check, that they can't legally hold you responsible for the rest. Is this true?


Asked on 2/04/05, 4:37 pm

1 Answer from Attorneys
Gregory J. Roth Gregory J. Roth, PLLC

Re: Paid In Full on checks

The legal term for what you refer to is "accord and satisfaction". Putting a restriction such as "Paid in Full" on a check does not necessarily allow you to walk away from the debt, for example if the amount you tender with such restrictions is an undisputed portion of a disputed amount. Many if not most creditors are aware if this tactic and will refuse checks with this notation unless payment is for the full amount of the debt. www.lawgreg.com

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Answered on 2/04/05, 5:25 pm


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