If a check is cashed with a notation such as “balance” or “paid in full’, does this hold up in court?

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If a check is cashed with a notation such as “balance” or “paid in full’, does this hold up in court?

I was recently sent a check for $3000+ with a note on the memo line “payroll balance…”. This follows e-mail correspondence where the writer of the check (my boss) tells me he believes this amount is what I am due and the Labor Commissioner can decide if he owes any more money. Will cashing this check settle my claim?

Asked on January 20, 2012 under Employment Labor Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

No, writing "paid in full" or "balance" on a check, by itself, has no legal effect. While parties can settle a claim for less than the full amount, it must be by the agreement of both parties; the debtor may not unilaterally write "paid in full" or "balance" on the memo line of a check and thereby settle the claim for that amount, unless the creditor (the one to whom money is owed) had evidenced agreement to settle the claim for partial payment.


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