Cheque cashed=accepance of terms?

Trick of the Tail

Hi, can anyone comment on this scenario please?

There is a dispute between a finance company and their 'customer', in that they say he owes some interest, he says he doesn't.

He sends them a cheque for the amount he believes to be owed (i.e. not including the disputed interest), with a letter stating that the cheque is offered in full and final settlement of the account.

The finance company cash the cheque.

Thereby, I think, accepting the terms under which it was offered.

Am I right therefore, that in this situation the debt is now legally cleared?

Thanks

Andy

drunkmonkey

I don't no the legalities around it but I'd assume if it's not stated that by cashing the cheque you abide to the terms and conditions of the letter and accept that cashing this cheque is final payment for the debit. They would still owe the debt.

If you think about it, let's say you own me €100 and you send me a cheque for €10 saying that it's the final payment. What would you do? Would you cash the cheque and at least get €10 of the debt then go chase for the rest at your leisure. Or would you just go grand and write it off.

I think they have up to 6 years to pursue the debt, could be wrong.

If they just paid the capital and no interest, they must owe some interest. The % figures would have all been written down, there shouldn't really be any dispute unless someone has their sums wrong.

Trick of the Tail

It's a bit more complicated than that, but I was of the impression that if you don't agree to the terms nder which a payment is offered you return the cheque uncashed.

The dispute is because the debt was one of these '12 months no interest' schemes. The customer sent the cheque to clear the capital before the 12 months was up, the lender claims they didn't receive it in time - in fact they say they never received it, and informed the customer of this after the 12 months had passed.

So the borrower sent the lender a replacement cheque with the caveat that it was offered in full and final settlement.

The lender cashed the cheque but is still persuing the borrower for an exhorbitant interest amount.

A.

drunkmonkey

Is there any proof the cheque was delivered before the agreed date, Recorded delivery?

Was the settlement figure agreed and a payment method confirmed? Not noticing the price of a car going out of a bank account would be a little strange.

Trick of the Tail

There is no proof it was sent, unfortunately. But the whole point I'm trying to make is the fact that the settlement cheque was offered in full and final settlement.

They accepted these terms by cashing it.

Or am I wrong?

(oh and it was for a lot less than the price of a car).

darragh666

Might be worth having a look at Foakes v Beer: http://en.wikipedia.org/wiki/Foakes_v_Beer


Edit: and Pinnel's case: http://en.wikipedia.org/wiki/Pinnel%27s_Case

jblack

If offering a full and final settlement amount, a written acceptance of same should be received before any money is paid.

MagicSean

darragh666 wrote: »

Might be worth having a look at Foakes v Beer: http://en.wikipedia.org/wiki/Foakes_v_Beer


Edit: and Pinnel's case: http://en.wikipedia.org/wiki/Pinnel%27s_Case

I think the difference here is that the amount of interest due was disputed.

Milk & Honey

alinton wrote: »

There is no proof it was sent, unfortunately. But the whole point I'm trying to make is the fact that the settlement cheque was offered in full and final settlement.

They accepted these terms by cashing it.

Or am I wrong?

(oh and it was for a lot less than the price of a car).

Wrong! A contract cannot be varied other than by agreement of both parties. The Party who accepted the cheque accepted it on the basis that they were owed money under the contract. They are under no obligation to accept any new condition. A contract cannot be made by silent acquiescence and equally cannot be varied in that way.