Does writing "paid in full" on a check discharge a debt? It depends. While it is true that creditors frequently settle debts for less than the full amount due, for the settlement to be valid, the debtor and the creditor have to agree to the terms. In other words, a debtor cannot discharge a debt by unilaterally declaring a partial payment to be payment in full simply by writing the words "paid in full" on his check or payment unless the creditor agrees.
In the case of Republic Funding Corporation of Florida v. Juarez, 563 So.2d 145 (Fla. 5th DCA 1990), a real estate broker sued an owner-seller of real property for unpaid commission after depositing a check marked "paid in full, full payment." The owner-seller pleaded the affirmative defense of accord and satisfaction and moved for summary judgment which was granted and then, but then reversed because the court found that there was no agreement on the part of the broker to accept anything other than his full commission.
Accord and satisfaction was explained in the case of Owner-Operator Independent Drivers Association, Inc. v. 4 Points Logistics, LLC, 2007 WL 2071389 (M.D. Fla.), as follows:
A defense of accord and satisfaction involves a two-step process of proof that (1) the parties mutually intended to effect settlement of an existing dispute by entering into a superseding agreement. . . and (2) there was actual performance with satisfaction of the new agreement which acted to discharge the debtor's prior obligation. In short, under Florida law, an accord and satisfaction must contain the elements of a normal contract, which include offer, acceptance and consideration.
See also Florida Statutes §673.3111, Uniform Commercial Code, pertaining to accord and satisfaction by use of instrument or check.
A debt can be discharged by writing "Pain in Full" on a check, but only after the elements of accord and satisfaction have been met which involves proving the elements of that defense. If you are interested in retaining my services in Jupiter, Palm Beach Gardens and/or throughout Palm Beach County and the State of Florida, please feel free to contact me at (561) 602-4447 or liz@elizabethmontgomerylaw.com or visit my website at www.elizabethmontgomerylaw.com.
In the case of Republic Funding Corporation of Florida v. Juarez, 563 So.2d 145 (Fla. 5th DCA 1990), a real estate broker sued an owner-seller of real property for unpaid commission after depositing a check marked "paid in full, full payment." The owner-seller pleaded the affirmative defense of accord and satisfaction and moved for summary judgment which was granted and then, but then reversed because the court found that there was no agreement on the part of the broker to accept anything other than his full commission.
Accord and satisfaction was explained in the case of Owner-Operator Independent Drivers Association, Inc. v. 4 Points Logistics, LLC, 2007 WL 2071389 (M.D. Fla.), as follows:
A defense of accord and satisfaction involves a two-step process of proof that (1) the parties mutually intended to effect settlement of an existing dispute by entering into a superseding agreement. . . and (2) there was actual performance with satisfaction of the new agreement which acted to discharge the debtor's prior obligation. In short, under Florida law, an accord and satisfaction must contain the elements of a normal contract, which include offer, acceptance and consideration.
See also Florida Statutes §673.3111, Uniform Commercial Code, pertaining to accord and satisfaction by use of instrument or check.
A debt can be discharged by writing "Pain in Full" on a check, but only after the elements of accord and satisfaction have been met which involves proving the elements of that defense. If you are interested in retaining my services in Jupiter, Palm Beach Gardens and/or throughout Palm Beach County and the State of Florida, please feel free to contact me at (561) 602-4447 or liz@elizabethmontgomerylaw.com or visit my website at www.elizabethmontgomerylaw.com.
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