Q: If someone cashes your check, does that imply acceptance of what is written in the memo line?
I sold my house after replacing a water line that later failed. Buyers had to repair the water line and threatened to sue me if I did not pay for it. I did and have a check for $1800. My realtor told me to write on my check "Cashing of this check settles any and all claims regarding sale of (name) property" in the memo line to prevent them from coming after me again with bogus claims. Does this memo cover me if they cash the check. Also, does this wording protect me?
A: That is called "accord and satisfaction." And it can work. If it was payment in full for the water line, then buyers might not have any other related claim to make against you. Or it might not work if it is not payment in full, and the buyer sues you for the remainder. The best way, would be to prepare a written document in which buyer agrees to accept payment in full of $1800 and releases all claims. It can work to write that on the check, but it is not guaranteed that it will protect you. The buyers might sue you in small claims court, and you would offer the deposited/cancelled check as your defense. You can use the Find a Lawyer tab to check with a local attorney.
A: In Ohio the law has swung back and forth on the issue of signing under protest. Typically the issue will arise when the phrase "paid in full" is placed in the memo. The law of Ohio has taken three positions: (1) it is of no effect and should be ignored, (2) the payee can endorse the check signed under protest and therefore it is of no effect, and (3) it is effective against the payee as long as there is a well established ongoing dispute as to the amount owed. Without looking into it more could not tell you the position Ohio currently stands by.
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