To Cash the Check or Not to Cash the Check
Whether you are a seasoned business owner or a relative new-comer, the issue either has or will come up sooner or later. A customer tenders payment of a sum less then the full amount due and owing for services rendered yet the check is marked "paid in full," "acceptance of this check is payment in full," or something similar.
The question is, what is the effect of cashing the check on the customer's account? Under the Uniform Commercial Code (UCC) if there is bona fide dispute between the parties and the business owner accepts and cashes the check an accord and satisfaction has occurred and the checkwriter will have a defense if the business owner would happen to take legal action for the difference.
So, under the UCC, if there is a bona fide dispute as to the amount owed by the consumer and the check is conspicuously marked "paid in full" or something similar then the business owner can do one of two things. He or she can either reject the payment and send the check back to the consumer or he or she can cash the check, essentially accepting the consumer's settlement offer and wiping out the rest of the debt.
