Does accepting a check which indicates "payment in full" legally binding?
Question Details: An invoice for over $2000 has been sent to a customer. The customer sent a check for a lesser amount indicating "payment in full" on the memo line. Does this mean that the business owner cannot seek the additional amount owed to the business?
Making such a notation on the the memo line of a check is not legally binding. By cashing it, you will not give up your legal rights to collect the full sum owed. The fact is that if someone owes money, they cannot unilaterally change the amount owed or even the terms of payment. There is a common misconception that such a notation as you have described has legal force; it does not. The memo line line is strictly for informational purposes; it simply helps to identify the reason that the check was written. Think about it, if it were that easy to alter the terms of a payment, everyone would do it.