Q: Can a debt be settled by signing over a cashier's check?
I'm owed $30,000 by a friend, and she wants to sign over a cashier's check for the same amount to me, which she received from selling land. There is no contract between us regarding the debt. Can this be done legally, and are there any potential issues I should be aware of? No one else is involved, and there are no time constraints.
A: To be safe, I would recommend having a settlement agreement prepared and signed by the parties. Simply signing over the check leaves the situation open to ambiguity and interpretation. It is highly advisable to have a proper settlement agreement prepared, reviewed, and signed by the parties explicitly stating what the agreement is and what claims are being released in consideration of the check. Also, if an issue arises with the check, a breach of contract claim may be pursued and the remedies may be listed on the agreement.
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