Be Cautious Endorsing Checks Marked Paid in Full

If you receive and cash a check marked final payment but try to collect additional payments for increased costs, you may be out of luck

Paid In Full

Originally published by Matthew DeVries on Best Practices Construction Law blog.

In Triangle Construction Co. v. Fouches and Assoc., the Court of Appeals of Mississippi recently held that the PAID IN FULL principle — or what lawyers know as accord and satisfaction — barred a contractor’s claim for additional payment.

Upon completion of the project, the owner sent contractor a check marked “Final Payment,” but the check did not compensate the contractor for its increased construction costs as a result of the delays or for the extracontractual project expansion. The contractor conceded that it cashed the check, but argued that it repeatedly asserted to the owner that it did not consider the “final payment” to be final and that it would continue seeking the remainder of what it was owed.

The court disagreed.

(more on accepting "paid in full" payments...)