Legal Question in Credit and Debt Law in New Jersey

A memo on a check is not a contract and is binding on no one as a general rule. Under old UCC 301-5, it used to be that a notation might be found to bind the maker of the check, but not the payee. There are instances where a notation on a check form creates a condition for payment, but this also has the effect of destroying the negotiability of the writing as a check.. In the same way, a statement such as "final payment" or "closes account" on a check is not binding on the payee. The memo field may be used as an indication of the intent of the maker such as when the payee has two or more open book accounts. Thus a payee who credits the wrong account might be required to correct the error. So, you can't resolve a dispute by writing a check for what you consider to be full payment and marking it a "in full payment". The payee will deposit the check and you will still owe the balance if any.

See also: http://info.corbettlaw.net/lawguru.htm