Can you bank a cheque that covers only part of the final account without forfeiting money still owed?

An important lesson arises when scrutinising the practical law applicable to tendering cheques in purported final settlement. Can you take a part-payment offered as final? Can you retain the right to claim the full sum?

It is not uncommon for an employer to seek to pay his contractor less than the full contract sum if there is a dispute as to compliance with the contract. If each party accepts such an unsatisfactory situation, its original legal rights may be released by a process known as accord and satisfaction. In such a situation, there must be consideration - a quid pro quo - for something promised or done.

Thus, if Stan Laurel, a contractor, agrees his window installation is not up to the contract tolerances, and Oliver Hardy is prepared to accept such inferior works, then their agreement to conclude their mutual obligations on payment of a lesser sum by Hardy would be a perfectly good accord and satisfaction and would release each party from the contract. But the agreement ... more.

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