Legal Question in Business Law in Minnesota

Re: cash check with memo ''paid in full''

If the amount is in dispute and you sign/cash the check, then the customer will probably be succesful in claiming that you have accepted the lesser amount as compromise of a disputed claim under the principal of accord and satisfaction. Sometimes we are sucessful in arguing to a court that there was no good faith dispute as to the amount owed and the customer was simply trying to pull a fast one on our client. But note that (1) that argument is not always successful and (2) you'll end up in court (with the corresponding legal expenses, delays and frustrations) in order to make the argument.

I generally advise my clients to hold the check and either (1) directly contact the customer to work this out or (2) have a lawyer send a demand letter for a clean check and try to work it out from there.

Please e-mail me directly with any further questions.