{"id":898028,"date":"2020-10-01T12:17:23","date_gmt":"2020-10-01T18:17:23","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=898028"},"modified":"2020-10-01T12:17:28","modified_gmt":"2020-10-01T18:17:28","slug":"paid-in-full-binds-contractor","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/paid-in-full-binds-contractor\/","title":{"rendered":"Not Just An Old Wives\u2019 Tale: Negotiating \u201cPaid In Full\u201d Check Binds Contractor"},"content":{"rendered":"\n<p>Matthew DeVries | <a rel=\"noreferrer noopener\" href=\"https:\/\/www.bestpracticesconstructionlaw.com\/2020\/09\/articles\/best-practices\/not-just-an-old-wives-tale-negotiating-paid-in-full-check-binds-contractor\/\" target=\"_blank\">Best Practices Construction Law<\/a><\/p>\n\n\n\n<p>Long before I was an attorney, I heard this tale that if you endorsed a check that had the words <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/pay-when-paid-california\/\" target=\"_blank\" rel=\"noreferrer noopener\">\u201cPAID IN FULL\u201d<\/a> written on the check, then you were accepting the check as full payment of whatever was owed.\u00a0 But I have never really thought about that legal principle because, \u201cPeople don\u2019t really do that, do they?\u201d<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/www.bestpracticesconstructionlaw.com\/wp-content\/uploads\/sites\/850\/2018\/01\/paid-in-full-640x480.png\" alt=\"\" class=\"wp-image-3069\"\/><\/figure><\/div>\n\n\n\n<p>In\u00a0<em>Triangle Construction Co. v. Fouches and Assoc.,<\/em>\u00a0the Court of Appeals of Mississippi held that the PAID IN FULL principle\u2014or what lawyers know as\u00a0<em>accord and satisfaction<\/em>\u2014barred a contractor\u2019s claim for additional payment.<\/p>\n\n\n\n<p><strong>The Facts.&nbsp;<\/strong>The contractor won a bid to construct a water system in two local counties.&nbsp; Following completion of the project, the contractor filed a claim against the owner and engineer for damages allegedly resulting from the negligence of the owner and engineer.<\/p>\n\n\n\n<p>Upon completion of the project, the owner sent contractor a check marked \u201cFinal Payment,\u201d but the check did not compensate the contractor for its increased construction costs as a result of the delays or for the extra-contractual project expansion. The contractor conceded that it cashed the check, but argued that it repeatedly asserted to the owner\u2014including in a letter sent to then engineer\u2014that it did not consider the \u201cfinal payment\u201d to be final and that it would continue seeking the remainder of what it was owed.<\/p>\n\n\n\n<p><strong>The Court\u2019s Ruling.&nbsp;<\/strong>The court disagreed.&nbsp; Under Mississippi law,&nbsp; despite what the parties may argue was their intent, cashing a check marked \u201cfinal payment\u201d constitutes an accord-and-satisfaction agreement, which precludes that party from bringing future claims for additional payment. In&nbsp;<em>Triangle Construction<\/em>,&nbsp;the court held that the contractor\u2019s claims against the engineer were barred by the doctrine of accord and satisfaction.<\/p>\n\n\n\n<p><strong>So What?<\/strong>&nbsp;The \u201cpaid in full\u201d principle is not just an old wives\u2019 tale.&nbsp; Depending on your state\u2019s law, if you negotiate a check that is marked \u201cpaid in full\u201d or even \u201cfinal payment\u201d then you are risking the fact that you may be settling any claims you have.&nbsp; If you are a contractor that seeks to reserve those claims, then don\u2019t cash the check if it is marked with special language on it.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Matthew DeVries | Best Practices Construction Law Long before I was an attorney, I heard this tale that if you endorsed a check that had the words \u201cPAID IN FULL\u201d written on the check, then you were accepting the check as full payment of whatever was owed.\u00a0 But I have never really thought about that&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/paid-in-full-binds-contractor\/\">Continue reading <span class=\"screen-reader-text\">Not Just An Old Wives\u2019 Tale: Negotiating \u201cPaid In Full\u201d Check Binds Contractor<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14],"tags":[9895,18,11311,11310],"class_list":["post-898028","post","type-post","status-publish","format-standard","hentry","category-construction-2","tag-advise-consult","tag-contractor","tag-full-payment","tag-paid-in-full","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Not Just An Old Wives\u2019 Tale: Negotiating \u201cPaid In Full\u201d Check Binds Contractor - Advise &amp; 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