Does writing final payment on a check have any legal effect?

UPDATED: Aug 22, 2012

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Does writing final payment on a check have any legal effect?

I made a check amount for less than the total remaining balance on my car. On the check I wrote, “Agreed Final payment for purchase of X”. They cashed the check. Does that mean they contractually agreed to accept my final payment to own the car even though it was less than the remaining balance? The check amount was over a $1k but about $400 less than total balance. I heard their was a court case similar to this where a man won since it was within the 3 requirements for a contractual agreement. The intent and consideration to enter an agreement of selling the car to me for cash, an offer written on check to pay the stated amount and acceptance since they cashed it. Please let me know if I can now demand the title of the car?

Asked on August 22, 2012 under Business Law, California


Cameron Norris, Esq. / Law Office of Gary W. Norris

Answered 10 years ago | Contributor

Normally, you have to show the intent of the other party to be bound to the contract.  MOST cases in this area have found that simply writing "final payment" on the check is an effort to pull the wool over the creditor's eyes. 

If you had written up a separate contract labeled "Accord and Satisfaction" that described the check as being the last payment--and they signed it...then you would have a case.  I strongly doubt a court would accept your argument.  Just pay the $400.  It's cheaper than the court filing fees you would most likely have to pay to fight this thing out.

Best of luck.

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