If a payment via check was agreed in contract to be cashed on a specific date but was cashed a month early, is that a breach of contract or illegal?

UPDATED: Oct 1, 2022

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If a payment via check was agreed in contract to be cashed on a specific date but was cashed a month early, is that a breach of contract or illegal?

I purchased a truck in December of 2017 from a dealership and we agreed that my down payment of $2000 would be split into 3 payments checks with the scheduled payment dates on them. First payment of $500 was due a few days after I purchased the truck in December and was made as agreed second check of $5000 was scheduled for January 20th of 2018 but was changed to February 20th after verbal agreement between I and the dealership. The third payment was $1000 due on the 20th of march 2018 but was cashed on February 20th 2018, a month earlier than agreed on. All of the checks had the date to be cashed as agreed on them.

Asked on February 21, 2018 under Business Law, Oregon


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Technically, it is a breach of contract (of the agreement as to the timing of payment), but there's nothing to do about it. If you sue them for breach, by the time you get them to court, the later payment date will have passed, so they will interpose the money you owe them as a set off vs. what they owed you for cashing the check early; the two amounts will net out, and you'll be left in the same place, with them holding your money. The fact that they cashed the check early will not absolve you of your obligation to pay for the car, so you won't be able to get out of the last payment; therefore, you'll have to pay it anyway, and the court will not give you money for the check being cashed early when, by the time you see the inside of the courtroom, the money is due anyway.

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